October 5th 2024

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The world this week
Politics
Business
The weekly cartoon
This week’s covers
The world this week

Politics
October 3rd 2024

Israel launched a ground invasion of southern Lebanon, initially sending

small numbers of troops over the border but then preparing to deploy
additional forces. They were soon engaged in heavy fighting with Hizbullah,
Iran’s biggest proxy militia in the region, in which Israeli troops were
killed. More than 1,000 Lebanese combatants and civilians have been killed
and over 1m displaced. Iran lashed out with a direct attack on Israel, firing
around 200 ballistic missiles. A man was killed in the West Bank when a
missile fragment fell on him. No other deaths were reported. Binyamin
Netanyahu, Israel’s prime minister, said Iran would pay a “heavy price”.

Iran’s strike came in the aftermath of Israel’s assassination of Hassan

Nasrallah, the leader of Hizbullah in Lebanon since 1992, in air strikes on
southern Beirut that targeted the group’s headquarters. Israel has now killed
most of Hizbullah’s military leadership in the past two weeks and destroyed
perhaps half of its 120,000 or more rockets and missiles.

Two Palestinian gunmen killed seven people in a shooting and knife attack
in Tel Aviv. The two terrorists were shot and “neutralised” by a security
officer and nearby civilians, according to the police.

Kenya’s Parliament started proceedings to impeach Rigathi Gachagua, the

country’s deputy president, over his alleged role in anti-government protests
in June. Dozens of people were killed in the protests, which nearly unseated
the government.

At least 45 people died and more than 100 were missing after smugglers
forced migrants off two boats travelling from Yemen to Djibouti. The
incident makes 2024 the deadliest year on record for migrant sea crossings
between the Horn of Africa and Yemen. Most recently, 196 people had
drowned while trying to cross in June.

The hard-right Freedom Party (FPÖ) won the most votes in Austria’s general
election, the first time it has claimed victory. Its chances of forming a
government are slim. Karl Nehammer, the country’s incumbent chancellor,
whose conservative People’s Party (ÖVP) came second, may try to hammer
together a coalition of Social Democrats, liberals and Greens. The ÖVP and the
FPÖ have been coalition partners before; the last one ended in 2019. But Mr

Nehammer has ruled out the inclusion of Herbert Kickl, the FPÖ’s leader, in
any new alliance.

Mark Rutte took over from Jens Stoltenberg as NATO’s secretary-general. In his
first speech Mr Rutte reiterated the alliance’s commitment to Ukraine,
warning that the cost to the West would be much higher if Russia won the
war. Meanwhile, nine people were killed in Russian drone attacks on a
hospital in Sumy, in north-east Ukraine. Six people were killed in Russian
shelling on Kherson, which lies close to the front line. And Vuhledar fell to
Russian troops. The town had managed to withstand the invaders for two
years.

The end of a deep history

Britain’s last remaining coal-fired power station officially shut down,
bringing an end to 142 years of coal-fired electricity generation in the
country. The world’s first coal-power station was built in London in 1882 by
Thomas Edison. Plans to phase out coal were announced in 2015, when
about a quarter of Britain’s electricity was generated by the fossil fuel.
Britain’s greenhouse-gas emissions have fallen by more than half since
1990.

After two years of negotiations, Britain said it would hand over sovereignty
of the Chagos Islands to Mauritius. As part of the deal America will still be
able to use the military base on Diego Garcia, a strategic hub for navy ships
and long-range bombers in the Indian Ocean. The British government said
the new treaty “will address wrongs of the past”. Former inhabitants of the
Chagos Islands will be allowed to resettle there.

Ishiba Shigeru became Japan’s new prime minister, following a contest in

the Liberal Democratic Party to replace Kishida Fumio. Mr Ishiba named his
cabinet, but also called a snap general election for October 27th. The new
finance minister is Kato Katsunobu, who was a health minister under Abe
Shinzo and is a firm believer in Abenomics. He has called for a stimulus
package that boosts wages and capital spending.

Responding to the latest bout of sabre-rattling from North Korea, South

Korea displayed its Hyunmoo-5 ballistic missile at a military parade for the
first time. The powerful weapon has been developed as a bunker-buster.
Yoon Suk-yeol, South Korea’s president, warned the North that if it
attacked, “That day will be the end of the North Korean regime.”

At least 224 people died in flooding and landslides in Nepal. Kathmandu,

the capital, registered the highest daily rainfall for decades.

S. Iswaran, a former transport minister in Singapore, was sentenced to 12

months in prison for receiving $300,000 in gifts while in office and
obstructing justice. Mr Iswaran had pleaded guilty to the charges, in the first
corruption case involving a Singaporean minister since 1986.
Claudia Sheinbaum was sworn in as Mexico’s president, the first woman to
hold the job. Ms Sheinbaum is from the same left-wing party as her
predecessor, Andrés Manuel López Obrador. In a speech she sought to
reassure investors that their investments in Mexico would be safe following
judicial reforms that have been criticised for undermining the rule of law.
She reiterated that the central bank would remain independent.

Argentina’s statistics agency recorded a big jump in poverty, with 53% of

Argentines living under the poverty line in the first six months of this year,
compared with 42% in the previous six months. Javier Milei, the president,
has cut subsidies for transport and fuel as part of his drive to normalise the
economy. A spokesman blamed the rise in poverty on the “disastrous
situation” that the government inherited from left-wing administrations.

In Canada Justin Trudeau survived a vote of no confidence in Parliament,

the second in under a week. After two stinging by-election defeats the prime
minister is facing calls to hold an early general election, especially from the
opposition Conservatives, who are ahead in the polls. The Bloc Québécois,
which wants independence for Quebec, has promised to support the Liberal
government, but only if it boosts the state pension.

A deadly tempest
Hurricane Helene left a trail of destruction across six American states,
killing about 200 people. Hundreds of people are reported to be missing.
North Carolina bore the brunt. The category 4 storm made landfall in
Florida’s Big Bend region, packing sustained winds of 140mph (225kph).

J.D. Vance and Tim Walz, the two vice-presidential candidates in

America’s election, held a televised debate. The candidates were amiable,
focusing on domestic policy. Viewers were equally split on who came off the
better.

Jimmy Carter celebrated his 100th birthday. The former American

president, who has been receiving hospice care for 19 months, has said he is
determined to vote for Kamala Harris in November’s election.
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The world this week

Business
October 3rd 2024

Dockworkers on America’s east and Gulf coasts went on strike, their first
since 1977. Some of the ports affected are the busiest in the country, and
include New York and New Jersey, Savannah and Houston. The workers’
union has rejected a pay rise of 50% over six years. With just a month to the
election, the White House pressed employers to raise their offer, as
businesses demanded that federal law is invoked to keep the ports open. A
long strike will snarl up shipping and push up freight rates. Analysts at
JPMorgan Chase estimate that it could cost the economy between $3.8bn
and $4.5bn a day.

In reverse gear
The strike will also hit the car industry, as the ports account for a sizeable
chunk of trade in vehicles and spare parts. It couldn’t come at a worse time,
with General Motors and Toyota reporting declining sales in America.
Stellantis, owner of the Chrysler brand, cut its full- year guidance, driving its
stock down by 13%. In Europe Volkswagen issued its second profit warning
in three months because of the “challenging market environment”. Aston
Martin’s stock fell by 25% after it, too, said annual profits would be lower
than it had hoped.

Bucking that trend, Tesla reported its first quarterly rise in deliveries this
year. The carmaker delivered almost 463,000 vehicles from June to
September, an increase of 6.4%, year on year.

Nike’s woes continued, as it reported a 10% drop in sales for its recent
quarter, year on year. The sportswear company withdrew its earnings
guidance for the full year, shortly before Elliott Hill takes over as chief
executive on October 14th.

OpenAIraised $6.6bn in its latest funding round, giving it a value of $157bn.

SoftBank reportedly invested $500m. After a period of retrenchment
following some disastrous investment decisions, Son Masayoshi, the
Japanese tech conglomerate’s boss, has said he is going on a “counter-
offensive” to increase the group’s spending on artificial intelligence.

California’s governor, Gavin Newsom, vetoed a state bill that would have
brought in strict safety requirements for the development of large-scale AI
models. The bill called for AI to have full shutdown capabilities and security
protocols to avoid “critical harms” to infrastructure and people. It was
opposed by Google, OpenAI and Meta, but supported by Elon Musk.
Chinese stockmarkets snapped out of their funk and rallied in response to
the government’s recent stimulus package, chalking up their biggest daily
gains since 2008. The benchmark CSI 300 rose by 25% over five days, its most
ever by that measure. The Shanghai Composite was up by 21% over five
days, its largest gain since 1996. Hong Kong’s Hang Seng Index also surged;
it has risen by 30% since the start of 2024.

The Federal Trade Commission cleared Chevron’s acquisition of Hess, an

energy exploration company, but blocked the chief executive of Hess from
joining Chevron’s board. The regulator has lodged a complaint against John
Hess, accusing him of communicating with OPEC and encouraging the cartel to
“stabilise production and draw down inventories”, which could cause oil
prices to rise. The FTC says that giving Mr Hess a board seat would have let
him “amplify” this message. Hess responded that the FTC’s claims were
“without merit”, and that Mr Hess had said similar things to the American
government.

Abu Dhabi’s state oil company offered to buy Covestro, a German

chemical firm that was separated from Bayer in 2015, for €14.7bn
($16.2bn). If it passes regulatory muster in Europe the deal will be the
largest-ever takeover of a foreign entity by the United Arab Emirates.
Oil prices rose sharply amid the latest turmoil in the Middle East, pushing
the price of Brent crude above $75 a barrel. But over the month of
September the price of Brent fell by 9% and by 17% over the whole of the
third quarter, as traders weighed the likelihood of slowing global demand for
oil against possible short-term disruption to supply.

The euro zone’s annual inflation rate dropped sharply in September to 1.8%,
the first time it has fallen below the European Central Bank’s 2% target
since mid-2021. That strengthens the case for the ECB to cut interest rates
again when it meets on October 17th.

Money, it’s a gas

Pink Floyd reportedly sold the rights to its catalogue of recorded songs to
Sony for $400m (though not the songwriting rights). The deal brings an end
to years of squabbling about rights among the band members. The decades-
long feud between David Gilmour and Roger Waters is as legendary as Pink
Floyd’s music.
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The world this week

The weekly cartoon

October 3rd 2024

Dig deeper into the subject of this week’s cartoon:

The bloodshed in the Middle East is fast expanding

Lebanon faces its worst crisis since the end of the civil war
Has the war in Gaza radicalised young Palestinians?

The editorial cartoon appears weekly in The Economist. You can see last
week’s here.
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The world this week

This week’s covers

How we saw the world
October 3rd 2024

Ever since Hamas’s slaughter of Israelis on October 7th 2023, violence has
been spreading. One year on, the Middle East is an inch away from an all-
out war between Israel and Iran. Israel’s decapitation of Hizbullah, a
Lebanese militia backed by Iran, prompted the Islamic Republic to rain
missiles on Israel on October 1st. Israel may retaliate, hoping to end the
threat it poses to the Jewish state. But the idea that a single decisive attack
on Iran could transform the Middle East is a fantasy. As our special section
explains, containing the Iranian regime requires deterrence and diplomacy.
In the long run, Israel’s security also depends on ending its oppression of the
Palestinians. The challenge is to translate military prowess into lasting
strategic gains and ultimately peace. Without that, blood will keep flowing
for years to come.
Leader: The year that shattered the Middle East
Briefing: What Hamas misunderstood about the Middle East
Briefing: The bloodshed in the Middle East is fast expanding
Briefing: A year on, Israeli society is divided about the lessons of October
7th
Briefing: Has the war in Gaza radicalised young Palestinians?
This article was downloaded by zlibrary from https://www.economist.com/the-world-this-week/2024/10/03/this-weeks-covers
Leaders
The year that shattered the Middle East
Don’t celebrate China’s stimulus just yet
Socially liberal and strong on defence, Japan’s new premier shows
promise
Dismantling Google is a terrible idea
A map of a fruit fly’s brain could help us understand our own
Leaders | Iran, Israel and the Palestinians

The year that shattered the Middle East

Kill or be killed is the region’s new logic. Deterrence and diplomacy would
be better
October 3rd 2024

Ever since Hamas’s slaughter of Israelis on October 7th 2023, violence has
been spreading. One year on, the Middle East is an inch away from an all-
out war between Israel and Iran. Israel’s skilful decapitation of Hizbullah, a
Lebanese militia backed by Iran, prompted the Islamic Republic to rain
missiles on Israel on October 1st. Israel may retaliate, perhaps striking Iran’s
industrial, military or nuclear facilities, hoping to end once and for all the
threat it poses to the Jewish state.

Iran is certainly a menace, and use of force against it by Israel or America

would be both lawful and, if carefully calibrated, wise. But the idea that a
single decisive attack on Iran could transform the Middle East is a fantasy.
As our special section explains, containing the Iranian regime requires
sustained deterrence and diplomacy. In the long run, Israel’s security also
depends on ending its oppression of the Palestinians.

Iran’s latest direct attack on Israel consisted of 180 ballistic missiles. Unlike
an earlier strike in April, this time Iran gave little warning. But as before,
most of the projectiles were intercepted. The salvo was a response to the
humiliation of its proxy, Hizbullah, which until two weeks ago was the most
feared militia in the region. No one should shed tears for a terrorist outfit
that has helped turn Lebanon into a failed state. For the past year Hizbullah
has bombarded Israel, forcing the evacuation of civilians in its northern belt.
Israel’s counter-attack, unlike its invasion of Gaza, was long-planned. It has
made devastating use of intelligence, technology and air power, killing the
militia’s leaders, including its chief, Hassan Nasrallah, maiming its fighters
with exploding pagers and destroying perhaps half of its 120,000 or more
missiles and rockets.

More on this:

The bloodshed in the Middle East is fast expanding

What Hamas misunderstood about the Middle East
A year on, Israeli society is divided about the lessons of October 7th
Has the war in Gaza radicalised young Palestinians?
Read all our coverage of the war in the Middle East

This humbling of Hizbullah has triggered a crisis of credibility for its

sponsor. For three decades Iran has tried to intimidate Israel, Arab states and
the West with a twin-track approach of threatening to race for a nuclear
bomb and organising an “axis of resistance”, a network of militias including
Hamas, Hizbullah and the Houthis in Yemen. Now that axis is reeling: Israel
has battered Hamas’s military wing in Gaza and outwitted Hizbullah.
Suddenly Iran’s regime looks too weak to help its cronies—and, perhaps, to
defend itself. Even its ballistic missiles are no match for Israel’s air
defences.

For Israel the danger now is hubris. There could be mission creep in
Lebanon, with limited infantry incursions morphing into a full invasion, a
mistake Israel made in 1982 and again in 2006. Its impending retaliation
against Iran poses even greater risks. One option would be to destroy Iran’s
oil-export hubs, crippling the regime’s finances and rattling energy markets.
Another would be to strike its nuclear facilities. Some in Israel see a window
of opportunity. For now, Iran’s ability to hit back via Hizbullah is blunted,
but in the next couple of years it has a strong new incentive to build its first
nuclear weapon, to re-establish deterrence. The hard right of Israel’s ruling
coalition, including Binyamin Netanyahu, the prime minister, dream that a
single, devastating strike on Iran now could end all major threats to Israel’s
security for the foreseeable future.

This view is seductive but dangerous. It is true that Iran’s behaviour has
grown worse since Donald Trump’s administration abandoned the deal to
freeze its nuclear programme. In the past year Iran has accelerated uranium
enrichment, armed the Houthis, executed hundreds of dissidents at home and
supplied vast numbers of drones to help Russia kill Ukrainians. Its newish
president, Masoud Pezeshkian, is supposedly a reformer but really a captive
of conservatives. Yet for all that, Iran is unpredictable. Its clerical-military
regime is unpopular at home and faces economic decay and a succession
crisis when the 85-year-old supreme leader, Ali Khamenei, dies. A one-off
attack on its nuclear sites might destabilise the regime. But it could fail to
destroy those facilities, which are deep underground, and embolden
hardliners who might dash even faster for a bomb, perhaps aided by Russia.

A more effective way to deter Iran might look like this. Israel, backed by
America, should make credible threats to conduct repeated military strikes
on its nuclear programme for years to come to prevent it from obtaining a
bomb. America and its allies should enforce tougher sanctions on its oil
exports, if it seeks to re-arm its proxy militias. In addition, there must be
incentives to help Iran’s reformers. Diplomats should make clear that, if Iran
stops its quest for nuclear weapons and arming its proxies and Russia, it will
get sanctions relief. Though President Joe Biden has signalled he does not
support a hasty attack on Iran’s nuclear sites, Mr Netanyahu may hope that a
future President Trump will back a more hawkish approach. What Israel
needs, however, is long-term bipartisan support from America, tempered
with counsels of restraint.

American support and Israeli restraint will also be crucial in tackling Israel’s
other big security problem: the Palestinians. Mr Netanyahu and his
hardliners want Israelis and the world to look only at Iran, downplaying the
threats in Gaza, where Hamas is all but crushed, and in the West Bank.

The narrow path to peace

Yet on the day of Iran’s strike more Israelis died from a gun and knife attack
in Tel Aviv than from missiles, and the biggest loss of Israeli life in a year of
war has been from Hamas’s home-grown killers. Never-ending repression,
after the deaths of more than 40,000 Gazans in the past year, will breed a
new generation of militants. In Israel, the settler movement and its toxic
politics imperil the open values that undergird the country’s high-tech
economy. Any rapprochement with Saudi Arabia, which could help contain
Iran, depends on treating Palestinians better. An eternal occupation, by
contrast, guarantees more human-rights abuses that would corrode Israeli
society and strain, perhaps even break, the alliance with America.

As war escalates in the Middle East, Israel’s government believes it has the
advantage. Perhaps it does. But the challenge is to translate military prowess
into lasting strategic gains and ultimately peace. Without that, blood will
keep flowing for years to come. ■

For subscribers only: to see how we design each week’s cover, sign up to our
weekly Cover Story newsletter.
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east
Leaders | Too soon to party

Don’t celebrate China’s stimulus just yet

It will take more than a spectacular stockmarket rally to revive the
economy
October 3rd 2024

China’s policymakers have blinked at last. For 18 months, even as deflation

set in and economic sentiment curdled, stimulus was half-hearted and
piecemeal. Then last week came a belated turnaround. Officials unleashed a
range of easing measures, suggesting that their pain threshold had been
reached.

Stockmarkets are rejoicing. As Hong Kong’s market reopened on October

2nd after a public holiday, shares rose by more than 6%, capping a rally of
over 20% in a mere six frenetic trading days. But China will need even more
stimulus to escape from its deflationary trap.
The mood shift began with the central bank. On September 24th, a week
after America’s Federal Reserve had eased policy and given it more room
for manoeuvre, the People’s Bank of China cut interest rates, eased reserve
requirements for banks and reduced the cost of existing mortgages. It also
introduced new tools to stoke the stockmarket. Two days later, China’s
Communist Party promised to arrest the decline in the property market and
to fight the economic slowdown more forcefully. Media reports suggest the
central government may soon borrow an extra 2trn yuan ($285bn) or
roughly 1.5% of GDP. Half will help local authorities deal with their debts; the
other half will help consumers, including direct handouts to families with
more than one child.

The measures represent a long overdue change in the style and urgency of
China’s policymaking. For months it seemed that the government was scared
of doing too much, rather than too little, to help the economy. Xi Jinping,
China’s ruler, had disdained generous handouts to households, which he
feared would undermine their self-reliance. National leaders had failed to get
a grip on the country’s property slump, leaving it to individual cities to
cobble together responses without enough help from Beijing. Local
governments were so strapped for cash that they worsened the slowdown by
cutting spending and harassing firms for fees and back taxes.
Compared with past stimulus efforts, the latest measures have been better
communicated and co-ordinated, and more targeted at consumers. But after
their sluggishness, officials will face an uphill task of reviving sentiment and
spending. Even if all the reported fiscal measures are confirmed, they lack
the necessary scale. To revive growth and inflation, many economists think
China needs a stimulus of 7trn-10trn yuan, which would amount to 2.5-4%
of GDP if spread over two years.

Officials must also say how they will stop the property slump. That may
require the central government to guarantee the delivery of pre-sold but
unfinished properties. It also needs to tackle the silent forests of flats that
stand finished but unsold. Beijing wants state-owned firms to buy them and
convert them into affordable homes. But it has not put enough money where
its mouth is.

With a big enough stimulus, China’s economy would have a shot at escaping
from its deflationary doldrums. In time, consumers might feel confident
enough to spend, and companies to invest. China’s stimulus would also be
felt around the world—but differently from in the past.

During the global financial crisis China helped revive the world economy, as
the government unleashed a huge, infrastructure-heavy stimulus that stoked
roaring demand for imported commodities. If a new package is targeted
towards consumers, it will not fire up commodity markets as much. Instead,
if Chinese households bought more cars and other manufactured goods,
fewer of them would wash up in overseas markets that are fearful of Chinese
competition. Stimulus would not just lift the spirits of shoppers at home. It
might hearten China’s economic rivals abroad, too. ■

Subscribers to The Economist can sign up to our new Opinion newsletter,

which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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yet
Leaders | Ishiba Shigeru, gadfly-turned-leader

Socially liberal and strong on defence, Japan’s new

premier shows promise
But he must ditch his more eccentric ideas if he is to control his party
October 3rd 2024

In a turbulent world, Japan is a quiet force for stability. Yet its domestic
politics is stormy. Frequent scandals have undermined trust in the ruling
Liberal Democratic Party (LDP) and recently led to the resignation of Kishida
Fumio as prime minister. The LDP has now made an unexpected choice to
steady the ship in his wake: Ishiba Shigeru, a popular gadfly who has long
been an outsider and lost his previous four bids for the party presidency. To
succeed, he will have to learn to lead, rather than merely criticise.

A policy wonk, he brings deep experience in defence issues. He is frank

about Japan’s wartime misdeeds, and will thus help to nurture the vital but
tetchy relationship with South Korea. He combines a commitment to
strengthening Japan’s armed forces to enhance deterrence with a willingness
to maintain dialogue with China. He is stubborn and outspoken.

On economic matters, he is less knowledgeable or passionate. Though he

speaks often about reviving Japan’s forgotten regions, he offers few
specifics. He will probably let technocrats run economic policy. That means
wild missteps are unlikely. But so, too, are reforms that would require
political will and could help boost Japan’s growth prospects, such as making
labour markets more flexible. That is a pity.

The LDP came close to picking a much worse leader. Takaichi Sanae, the
standard-bearer of the LDP’s right wing, won the first round of the leadership
vote, besting eight other candidates, and lost the run-off to Mr Ishiba only by
five percentage points. Had she prevailed, Japan would have had as prime
minister a woman who plays down her country’s imperial-era atrocities, and
who insists on scratching already troubled relations with China and
upending the fragile rapprochement with South Korea by visiting the
Yasukuni Shrine, which houses the spirits of Japan’s war dead, including
war criminals. She favours big rises in defence spending, but offered no
credible plan to pay for them. And she has pledged to preserve a law
requiring married couples to have the same surname, which in practice
means wives give up theirs. (This rule is widely resented as outdated and
sexist, but social conservatives think it good for family harmony.)

That the ruling party mobilised against Ms Takaichi in the run-off is

heartening. But the paucity of alternatives is much less so. Nine candidates
ran, the largest field in decades, yet no transformational leader emerged: the
more competent of the bunch had too little popular appeal, and those who
rose in the polls were all deeply flawed.

Mr Ishiba has called a general election for October 27th. The LDP is expected
to win, as it has for nearly all of Japan’s post-war history, not because voters
happily support it, but because the opposition is a shambles. People
remember the most recent period of opposition-led government as chaotic:
the Democratic Party of Japan (DPJ) cycled through three prime ministers in as
many years, alienated America and bungled the response to a huge
earthquake, tsunami and nuclear meltdown in 2011. If today’s opposition
were wise, it would try to convince voters that it has learned from the past
and offer a fresh vision. Instead, last month the main opposition party
selected as its leader a man voters rejected 12 years ago: Noda Yoshihiko,
the last of the three DPJ prime ministers.

So Mr Ishiba is likely to win a mandate. His energy might help him break
through long-standing political logjams, in particular on social issues, such
as separate surnames and gay marriage, which is not recognised in Japan
despite broad popular support. Mr Ishiba has displayed a liberal streak more
in line with public opinion than his party’s, which is encouraging.

Don’t provoke superpowers

But his stubbornness could also lead him astray. He has long advocated
some provocative ideas, such as creating an Asian version of NATO to counter
China and revising the agreement that governs how American military
forces operate in Japan, to reduce what he sees as imbalances in the
relationship. Both ideas would at best be distracting and at worst
destabilising. If he picks impossible battles, his administration will stumble
and he will struggle to keep control of a party that has never trusted him. He
will have to learn pragmatism, fast. ■

Subscribers to The Economist can sign up to our new Opinion newsletter,

which brings together the best of our leaders, columns, guest essays and
reader correspondence.
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defence-japans-new-premier-shows-promise
Leaders | Shake up, not break up

Dismantling Google is a terrible idea

Despite its appeal as a political rallying cry
October 3rd 2024

The parallels draw themselves. In 1999 America’s government prevailed in a

high-profile antitrust suit against a tech giant it alleged was abusing a
monopoly. The case then turned on the “power of the default” in internet
browsers: Uncle Sam said Microsoft was forcing computer-makers to
distribute its browser along with its Windows software. It resulted in
proposals to break Microsoft up (though the firm won on appeal and
remained whole).

Tech-watchers could be forgiven for feeling a sense of déjà vu. In August

trustbusters scored their first major victory against big tech in a quarter of a
century when Amit Mehta, a judge in the District of Columbia, ruled that
Google was a monopolist in online search. Using the power of the default,
he argued, Google had blocked rivals and raised prices for its ads beyond
free-market rates. On October 8th the Department of Justice is due to file
proposed remedies for this abuse of monopoly power. These may include a
proposal to dismantle the tech giant—perhaps by hiving off Chrome, its
browser, or Android, its operating system for mobile handsets.

This would be foolhardy. It is not at all clear that it would solve the central
issue presented in the case. And besides, even though Google has long
enjoyed the vast profits associated with its vice-like grip on search, it may
not continue to do so. New generative artificial-intelligence (AI) tools, such as
ChatGPT and Claude, are quickly gaining market share.

Google is the web’s most-used search engine, handling about 90% of queries
in America. That dominance, Mr Mehta ruled, has been cemented through
“default search agreements”. Open up Safari on an iPhone or Mozilla
Firefox on a laptop and type a query into the search bar, and it will be
Google that returns the results. For the privilege of doing so Google shares
some of the advertising revenue its search engine generates. These payments
amounted to $26bn in 2021. Some $20bn went to Apple alone.

For firms to pay to be first in the queue for potential customers is hardly an
outlandish idea. Cereal-makers pay supermarkets to be “eye-level” on
shelves; publishers pay booksellers for spots on their coveted “front table”.
The trouble with default search agreements is that they do not just make one
option more prominent. They take choice away altogether.

Hiving off Chrome or Android would not fix this problem, as long as
Google were still allowed to pay their eventual owners to be the default
search engine. So the court should target default arrangements directly. It
could limit Google to being able to pay to be one of a range of choices of
search engine, a fix that European regulators have already put in place.
Absent the fat cheque Google pays to be the default, Apple and other deep-
pocketed tech firms might focus on building search engines of their own.

An order to force Google to make public some of the technology that

enables its search engine to work, such as its index of web pages and search-
query logs, could make it easier for rivals to try. The trial revealed that it
costs an estimated $20bn to build a search engine, plus $3bn-4bn per year in
annual research and development. Reducing those costs would let smaller
companies compete, too.

Another reason to avoid a remedy as drastic as a breakup is that technology

moves far faster than any legal system can. Add in the appeals process and
any action against Google is still years away. Yet already there is emerging
evidence that Google’s grip on search is slackening as generative-AI tools gain
ground. A survey by Evercore, a bank, found that ChatGPT is the “go-to search
engine” for 8% of Americans. Innovation dramatically weakened
Microsoft’s dominance a quarter-century ago, too. The firm was swiftly left
behind as mobile technology took off.

Antitrust intervention may have sped the firm’s decline. That is why it is
important for regulators to look forward as much as back. If Google is left
unchecked, the danger is that its incumbent position impedes competition.
With its huge proprietary datasets, Google may one day build better AI tools
than its rivals. Buoyed by its monopoly profits, it offers its current AI tools
free, unlike newer competitors which must charge subscriptions to help
cover their costs. If Google were indeed blocking future rivals, then limiting
its ability to use its search engine to distribute its AI products might stop it
from exploiting one monopoly to acquire another. A breakup, however
politically appealing it may be to some, is not the answer. ■

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Leaders | Know a fly, know thyself?

A map of a fruit fly’s brain could help us

understand our own
A miracle of complexity, powered by rotting fruit
October 3rd 2024

FOR BILLIONS of years, life was single-celled and boring. Even when it
became multicellular and more interesting, it took the evolution of brains,
and subsequent competition between them via the animal bodies they
inhabited, to create the biodiversity that exists today. Greater complexity
caused by brain-on-brain competition permitted better processing of
information from special organs for vision, hearing, smell, taste and touch.
This made for more cunning predators, more elusive prey and more
demanding sexual partners. It also (because much physiology is regulated by
the brain) allowed larger and more sophisticated bodies to evolve.
Even brainless plants owe a lot of their diversity to brains, for their lives are
constantly shaped by their interactions, both beneficial and hostile, with
brainy animals. Without pollinating insects there would be no flowers.
Without grazing ungulates, grasses would not have evolved.

Since Homo sapiens appeared, brains have started to analyse themselves.

And this week marks the publication of an important step towards the
betterment of that understanding. Researchers have produced a complete
map of the neurons in the brain of an adult fruit fly.

This map, called a connectome, traces the passage through the brain of the
filamentary, data-carrying protuberances of almost 140,000 neurons and logs
almost 55m connections between them. Earlier projects have mapped the
nervous systems of a simple worm (300+ neurons), a fly larva (3,016) and
the central part of an adult fly’s brain (about 27,000). But this is the real
McCoy, a complex, adult animal that can navigate in three dimensions, fight
its rivals, evade its predators and warn its confrères of threats.

That is a tremendous achievement and is already helping researchers

comprehend how flies’ neurons collaborate to process sensory information
and turn it into instructions for action. It should help them understand
people, too. True, the brains of flies and humans operate differently; with
more than 600m years of evolution separating them, they could hardly fail
to. But what worked technologically to produce the fly connectome should,
with a bit of scaling up and the application of enough dollars, work for
vertebrates as well.

That will start with mice. But, eventually (with enough technological
improvement and quite a lot more dollars) a human-brain connectome
should be doable. If and when this happens, many questions that are
intractable today, ranging from how to treat psychiatric diseases to what
makes humans human, may be easier to answer.

Some human brains, however, are not content to leave it at that. These brains
think the evolutionary trajectory of brains, far from having peaked with
Homo sapiens, is only just getting going. For, besides self-analysis, another
thing brains can now do is make simulacra of themselves. Having access to
the way natural selection has built brains over the course of hundreds of
millions of years will surely assist such efforts.

From their inception in the mid-20th century, computers have often been
described as electronic brains. In the beginning, that was flattery. But, as the
field of artificial intelligence (AI) advances, the flattery is becoming nervous,
to the point where some human brains worry that something is being created
which might run out of control.

Fortunately for the worriers, AI today is incredibly inefficient. It requires

power inputs which would service a small city and such vast quantities of
data to train itself that the entire internet is not enough. By contrast, flies,
which are powered by rotting fruit, can do things no AI can yet manage. If
their ability to navigate and avoid objects could be replicated, for example,
then designing self-driving vehicles would be a doddle.

Adding what natural selection has created to the creativity of human brains
might thus open up a whole new field of information technology in which
describing the results as electronic brains would be no more than the truth.
This would indeed carry brains on to the next stage of their evolutionary
journey. Then the worriers might have just cause—for whether human
brains, and their attendant bodies, would be wanted as passengers on that
voyage cannot be foreseen. ■

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help-us-understand-our-own
Letters
Letters to the editor
Letters | On the Cayman Islands, Afghanistan, Turkey, blood donations,
private tutors, Britain, sex and Christianity

Letters to the editor

A selection of correspondence
October 3rd 2024

Letters are welcome via email to [email protected]

Finance in the Caymans

The claim that Britain’s overseas territories are “key nodes in global money-
laundering networks” is as unfair to the good people of the Cayman Islands
as it is to those of the Falklands (“Laundry list”, September 14th). An
analysis by Transparency International in 2018 of cross-border money
laundering cases in the past 30 years identified a grand total of only 32 that
had any connection to the Cayman Islands. One prominent example was the
1MDB case in Malaysia, a fraud so expansive that few countries with financial
centres would have escaped some connection.

The Transparency International report failed to note, as did your article, that
companies in the Cayman Islands have long been required to verify their
owners and reveal them to law-enforcement authorities in Britain. By
contrast, until recently Britain’s own vaunted register of beneficial owners
relied entirely on self-reporting, leading to scores of Disney characters being
recorded as owners. A high watermark indeed.

The Cayman Islands’ government has made a commitment to make

beneficial ownership information available to members of the public with a
legitimate interest this year, another debunking of the long-outdated
stereotypes peddled by Hollywood fiction.
STEVE MCINTOSH

Chief executive
Cayman Finance
Grand Cayman

Being female in Afghanistan

No one should be surprised that the Taliban are withdrawing the few
liberties Afghan women had, one can only deplore it (“No country for
women’s rights”, September 21st). Those liberties, it must be said, were
available mostly for women from middle-income, well-educated families in
Kabul. Yet there was hope for all and opportunity for some.

Afghanistan will be able to foster women’s rights only after it ceases to be

an enclave shut off from the outside world by hostile geography and a lack
of infrastructure. The Western coalition strikingly had no interest in this and
failed to tackle it despite the billions of dollars poured into the country over
20 years.
ROMAIN POIROT-LELLIG

Chief of staff to the EU special representative for Afghanistan, 2008-10

Lagos

Turkey needs help

“Not wanted here” (September 14th) summarised the growing discontent in
Turkey with Syrian refugees. However, one of the root causes of the refugee
crisis in Turkey is the failure of the European Union to keep its promise to
support the country during the emergency. Turkey is the last buffer before
the EU in protecting Europe from the full repercussions of migration. Stronger
economic support in this area could smooth out the weight of refugees on
the Turkish economy and thus the bias against them.
YIGIT TATIS

Izmir, Turkey

Paying for blood

You argued that blood donors should be paid to meet the global demand for
plasma (“There must be blood”, August 31st). However, collection capacity,
not donor willingness, is the limiting factor in supply. When governments
invest in expanding capacity, supply also increases. Belgium experienced a
30% rise in plasma donations after launching a national plan in 2018 and
Denmark more than doubled its supply by investing in extra donor centres.

Moreover, although the cost for paid plasma is low, this is because
companies take blood from poorer neighbourhoods, relying on frequent
donors who need the money. These savings are often offset later when drug
companies use their control of the entire plasma supply chain to inflate
prices of plasma-derived medicines, which carry profit margins of up to
30%. Relying on voluntary donations is more cost-effective in the long run
by keeping medicine prices in check.
We should also consider the impact of payments on the safety of donors and
patients. Research shows that donating twice a week weakens the immune
system of blood donors. Because of mad-cow disease Britain had to destroy
its own plasma and relied on imported blood from 1998 to 2021. Had
Britain’s plasma in 1998 been part of a global supply chain, would we have
stopped all plasma use worldwide, or would the whole world have been
forced to accept the additional risk? The recent inquiry into infected blood in
Britain made clear that global trade amplifies potential safety risks, with
more than 30,000 patients infected by imported plasma from paid donors.

The world needs more plasma, but to increase the supply sustainably
governments should invest more in public collection efforts rather than
leaving this to the private sector, which will inevitably introduce payments.
PHILIPPE VANDEKERCKHOVE

Chief executive
Belgian Red Cross-Flanders
Mechelen, Belgium

Tutors in China
I agree that private tutoring in Asia is akin to an “arms-race dynamic”
(“Cramming culture”, September 21st). My friends at school boast about the
quality of their private tutors. We have a popular phrase in Chinese to
describe this: nei juan, which means internal stress. I fear the biggest
challenge for China’s youth is going to be maintaining basic mental health.
JACK WANG

Beijing
Learning from Tony Blair
Your article about the Labour government’s approach to reforming public
services in 1997 did not note that Tony Blair and his ministers took time to
decide how to go about these changes and their methods evolved in the light
of experience (”The vision thing”, September 21st). The work of Michael
Barber, an adviser, in the delivery unit was significant, but other approaches
were of variable effectiveness. Sir Keir Starmer’s government has an
opportunity to learn from what did and did not work, but must do so quickly
if it is to succeed.
SIR CHRIS HAM

Professor emeritus
University of Birmingham
The forbidden fruit
You noted that there was no “apple” in the story of Adam and Eve, apple
being a translator’s pun for evil (“Christianity’s sex addiction”, September
21st). In the 17th century Sir Thomas Browne pointed out that Saint
Jerome’s Latin translation of the Eden story uses the word fructus (fruit) to
denote the object that Eve eats.

In the seventh book of his “Pseudodoxia Epidemica” (Vulgar Errors), which

debunks various mistaken beliefs, Sir Thomas found that the Latin word
malum in the sense of apple appears only later in the Song of Solomon,
where it seems to have no bearing on the Eden story. The true source of this
misconception probably involves later translations and how meanings of
words evolved over time, as shown in Azzan Yadin-Israel’s recent work,
“Temptation Transformed”.
JOSH GREENFIELD

New York

Further to your review of Diarmaid MacCulloch’s book on sex and

Christianity, in my early teens my friends and I were greatly helped by a
sex-education lesson at our Christian school. The priest who held the lesson,
an elderly paragon of primness, reached his climax only after long
embarrassed rambles round the subject, telling us to “flee like the very devil
from passionate women”.

We have been on the lookout for them ever since.

ROD TIPPLE

Cambridge

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By Invitation
Philippe Lazzarini says the blows to humanitarian law in Gaza harm us
all
Ernesto Zedillo says AMLO has left Mexico on the verge of
authoritarianism
By Invitation | One year of war in Gaza

Philippe Lazzarini says the blows to humanitarian

law in Gaza harm us all
The head of UNRWA, the UN’s agency for Palestinians, warns the world
not to look away
October 2nd 2024

THE POLITICAL theorist Hannah Arendt warned that “the death of human
empathy is one of the earliest and most telling signs of a culture on the verge
of descending into barbarism.” As the war in Gaza reaches the one-year
mark it continues to reveal a frightening deficit of mutual empathy. What
can stop the descent into barbarism is the power of laws that are slipping
into irrelevance. Without them, where Gaza goes, so might the rest of the
world.

Gaza is now a place that horrifies even the most seasoned humanitarians. It
is a rubble-filled wasteland where civilians are forced to constantly move
like human pinballs as they are stalked by hunger and disease. The figure of
42,000 people reported killed is difficult to comprehend. No one is safe,
including the hostages taken from Israel who remain captive, their families
trapped in a terrible limbo.

Read all our coverage of the war in the Middle East

The Geneva Conventions, the moral compass of international humanitarian

law (IHL), were put in place 75 years ago to protect civilians and non-
combatants during conflict—a covenant agreed by all of its signatories, the
High Contracting Parties. Yet those signatories are failing in their
responsibility to ensure that all parties to armed conflict adhere to the
conventions. To permit any exceptions is to render those laws toothless.

IHLis blatantly disregarded when it comes to humanitarian assistance and

protection. In Gaza, more than 250 humanitarian personnel have been killed.
Two-thirds of UNRWA premises have been damaged or destroyed, killing at least
560 displaced people sheltering in them under the UN flag. Palestinian armed
groups, including Hamas, and the Israeli security forces have used UN
premises for military purposes. And clearly marked humanitarian-aid
convoys have been struck despite getting approval from the security forces
on their movements.

It is not only in Gaza that UNRWA’s personnel, premises and operations are
under attack. Draft laws in Israel’s Knesset seek to evict UNRWA from its
premises of more than 70 years in East Jerusalem; revoke its privileges and
immunities; and designate it as a terrorist organisation. A UN member state
designating a mandated UN entity as terrorists is unprecedented. It is also
dangerous.

These actions are not, as claimed, about UNRWA’s neutrality, or about its
humanitarian work. They are about UNRWA’s protection of the status of
Palestinian refugees. They seek to unilaterally undermine a future political
solution, and they contravene International Court of Justice rulings and UN
resolutions. They are an affront to the very notion of the rule of law.

To be clear, the goal here is both legally wrong and factually misconceived.
The rights of Palestinian refugees, including the right of return, were set out
in a resolution of the UN General Assembly which predates the creation of
UNRWA and therefore would remain in its absence, as would the refugee camps

of Gaza and the West Bank.

But the wider significance is chilling for those far beyond this conflict. The
reluctance within large parts of the international community to take
meaningful action in defence of international law weakens the foundations
of a delicate multilateral system. It is fuelling growing resentment in
particular in the global south, which perceives that the values enshrined in
the Universal Declaration of Human Rights and in international law do not
apply equally—even more unequally in the Israel-Palestine conflict. That
suggests strongly that some lives are indeed worth more than others.

Israel has claimed that children in UNRWA classrooms are taught hatred of
Israelis. In fact, students learn about universal values such as human rights
and equality. Yet teachers are struggling to answer questions about why
those rights are violated in Gaza or elsewhere in occupied Palestinian
territory. If humanitarian law does not protect these children—some
witnessing grave violations of their own rights—how can they be expected
to trust in any international law?

In the occupied Palestinian territories operational space is shrinking rapidly

not only for UNRWA but for any individual, organisation or country calling for
adherence to IHL or promoting a peaceful political solution to this decades-
long conflict. The shape of the international community’s humanitarian
response so far prolongs an occupation that has been declared illegal by the
highest court in the world and keeps Palestinians barely alive. It is, one year
into this war, in grave danger of becoming complicit in international crimes.

A ceasefire, hostage release, unfettered humanitarian access and a path to a

political solution are together the only means to bring Palestinians and
Israelis the peace they deserve. Yet it is merely a starting point. Safeguarding
the law, and with it the role of UNRWA as a provider of education and primary
healthcare, is critical for preventing a lost generation of children.

The High Contracting Parties are, at the UN’s request, likely to convene in
Switzerland in the next six months. Their task in rejuvenating the rule of law
is no less than to tilt Gaza, and the world, away from barbarism. ■
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blows-to-humanitarian-law-in-gaza-harm-us-all
By Invitation | Mexico

Ernesto Zedillo says AMLO has left Mexico on the

verge of authoritarianism
The former president exhorts Claudia Sheinbaum to opt for democracy
September 29th 2024

FOR ALMOST seven decades of the 20th century, Mexico was ruled by the
Institutional Revolutionary Party, known as the PRI. For most of that period,
the actions of the executive were neither monitored nor counterbalanced by
Congress, which was assumed to support the executive unconditionally, nor
by an independent judiciary, which was in effect subordinated to the
president.

When I became president of Mexico at the end of 1994, I brought my own

party, the PRI, together with all the opposition parties, to agree on and enact
constitutional reforms that established electoral institutions and a federal
judiciary that became genuinely independent, impartial and professional.
The reforms were not perfect, but they made Mexico a fully democratic
country, with a proper separation of powers. That made possible a peaceful
transfer of power to an opposition party, which duly occurred in 2000 at the
end of my six-year term.

Nearly 30 years later, the institutions at the heart of those reforms are now
threatened. Under president Andrés Manuel López Obrador, known as AMLO,
the independence and institutional capacity of the National Electoral
Institute (INE) have been relentlessly attacked and undermined. The first line
of attack has been to slander, insult and threaten both the institution and the
people elected to govern it. Its budget has been arbitrarily reduced.

The rules and procedures established in law regarding what the government
should not do before and during electoral campaigns—such as diverting
public funds for campaigns and attacking opposition candidates in media
controlled by the government—were systematically violated to favour the
ruling party’s candidates. When filling vacancies in the INE, individuals who
lacked the impartiality necessary for applying the law were appointed. What
is more, there are now catastrophic plans for a constitutional reform which
will replace the INE, and the tribunal that rules on electoral controversies, with
sham institutions under government control.

AMLOhas been even keener to destroy the independence and professionalism of

the judiciary and put forward a set of constitutional amendments to
transform it into a servant of the politicians. After June’s election, the INE,
now filled with councillors and magistrates appointed under the influence of
AMLO, awarded the ruling party and its coalition partners 74% of the seats in

the chamber of deputies (the lower house), although they obtained only 54%
of the popular vote. This over-representation was justified by a twisted, and
unconstitutional, interpretation of the rules for the allocation of seats to
coalitions.

The result was that AMLO’s ruling Morena party had the two-thirds majority in
the chamber of deputies needed to approve the constitutional changes. In the
Senate, the Morena coalition was one vote short of a majority. Mexican
media have widely reported that it obtained the missing vote by offering an
opposition senator impunity for himself and his family members, who were
accused of serious crimes.
With the enactment of the constitutional reforms, the entire judiciary—
judges, magistrates and Supreme Court justices—will be removed from
office within the next three years. Their positions will be filled by people
elected supposedly by popular vote, but more likely determined by the
executive and Congress, both controlled by the same political party.
Professional experience requirements will be minimal.

Not only will the preselection be political, but the machinery of the official
party will be mobilised in the judicial election campaigns—as it was in other
recent state and national campaigns—to elect the most docile individuals,
not the most competent. Naturally, other actors, such as organised crime
gangs, who want judges to suit their own ends, will have ample opportunity
to influence the results through their traditional means: money and violence.
This election procedure will be replicated in the state judiciaries.

Congress has already amended the constitution to give unprecedented power

to the armed forces, including giving them permanent control of the national
police and, even more concerning, getting rid of the constitutional
prohibition on military engagement in non-military tasks. The executive will
have the power to use the armed forces for any activities, without a
constitutional check on those decisions.

In all likelihood, the goal is to co-opt the armed forces into becoming
stakeholders in preserving a corrupt system, as has happened in countries
like Cuba and Venezuela. Constitutional amendments are also being
advanced to abolish autonomous state entities that serve essential purposes
in limiting corruption and the abuse of power, such as the agency
responsible for guaranteeing citizens’ right to freedom of information.

If these changes all take place, Mexico will no longer meet the conditions
for legal and fair electoral competition, practically ensuring that the
executive, legislative and judicial branches of government, as well as the
armed forces, will be controlled abusively and arbitrarily by the same party
for many years. Our hard-won democracy will be transformed, for all
practical purposes, into a one-party autocracy.

It remains a mystery why Claudia Sheinbaum, who was elected to be the

president of a democratic country, has endorsed these outrageous moves,
implemented by the departing president. When she takes office on October
1st, she will have to decide whether to be the leader of a democratic republic
or merely the powerless face of a tyranny. ■

Ernesto Zedillo was president of Mexico from 1994 to 2000, has been a
professor at Yale University since 2002 and is a member of the Elders.

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left-mexico-on-the-verge-of-authoritarianism
Briefing
The bloodshed in the Middle East is fast expanding
What Hamas misunderstood about the Middle East
A year on, Israeli society is divided about the lessons of October 7th
Has the war in Gaza radicalised young Palestinians?
Briefing | On many fronts

The bloodshed in the Middle East is fast

expanding
Israel seems certain to retaliate to Iran’s missile attack
October 3rd 2024

JEWS TRADITIONALLY mark the new year by eating an apple dipped in

honey, an expression of hope that sweet times lie ahead. As Israeli families
prepared to ring in the year 5785 on the evening of October 2nd, many must
have hoped that it would at least be less bitter than 5784, which began with
an atrocity. On October 7th 2023 Hamas, a militant Palestinian movement
based in Gaza, burst through barriers walling Gaza off from Israel,
massacred more than 1,100 people and took a further 250 hostage. During
the year that has followed, Israel has not only fought non-stop with Hamas
in Gaza, but also exchanged rockets with Iraq, Lebanon, Syria and Yemen.
As the year drew to an end, on September 30th, it sent troops across the
border into Lebanon, to battle Hizbullah, a Lebanese militia that has been
bombarding northern Israel. The next day Iran, a patron of both Hamas and
Hizbullah, launched a salvo of 181 missiles at Israel. As The Economist
went to press, the region was awaiting the inevitable Israeli riposte. Israel is
now fighting wars on several fronts, with no end in sight to any of them.

The Iranian attack on October 1st targeted two air-force bases and a
military-intelligence facility. The intention seems to have been to overwhelm
Israel’s missile-defence systems by force of numbers. If so, it failed almost
completely. Most of the missiles were intercepted and destroyed in mid-air.
A handful evaded the dragnet, but caused few casualties. In the West Bank a
Palestinian was killed by falling debris from a stricken projectile.

More on this:

The year that shattered the Middle East

What Hamas misunderstood about the Middle East
A year on, Israeli society is divided about the lessons of October 7th
Has the war in Gaza radicalised young Palestinians?
Read all our coverage of the war in the Middle East

That was the second time this year that Iran has fired directly on Israel. The
previous attack, on April 13th, came in retaliation for the killing of an
Iranian general when Israel bombed Iran’s embassy compound in Damascus.
Nearly all of that barrage was intercepted as well. At the time America’s
president, Joe Biden, urged Binyamin Netanyahu, Israel’s prime minister, to
“take the win” and not respond with devastating force. Israel’s retaliation
consisted of an attack on a single Iranian air-defence radar installation. That
was intended as a warning that Israel was capable of penetrating Iran’s air
defences and therefore doing lots of damage.

Iran has failed to heed the warning. There is little question that Israel’s
retaliation this time will be of a far greater magnitude. There are three sets of
possible targets. Israel could go after Iran’s leaders, in the same way that it
has assassinated much of the top ranks of Hamas and Hizbullah. It could hit
Iran’s infrastructure, in order to push an already weak economy over the
brink. In particular, strikes on the oil terminals at Iran’s ports would stop the
flow of its main export and starve the regime of much-needed cash. Two
strikes Israel has carried out in recent months against the oil terminal at the
Yemeni port of Hodeida, in response to missiles fired at Israel by the Houthi
militia, which is backed by Iran, were seen as a trial-run for such an attack.
Most alluring of all, however, would be strikes against facilities where Iran
is thought to be developing nuclear weapons—something Israel has been
contemplating for more than 20 years.

Israeli officials believe that Mr Netanyahu has been hoping for months to
provoke Iran into launching an attack that would give Israel an excuse to
target the nuclear sites. He has long faced scepticism, both in Israel and
abroad, about his conviction that all Israel’s security problems stem from
Iran. On September 30th he said in a televised statement, “When Iran is
finally free, and that moment will come a lot sooner than people think,
everything will be different.” That may be wishful thinking, but he would
clearly like to see Iran’s government toppled.

For much of the past year, as Israel pummelled Gaza, killing nearly 42,000
people and displacing most of its population, Iran’s strategy of encircling
Israel with proxies equipped with missiles and drones seemed to be working.
Hizbullah bombarded Israeli communities near Lebanon daily, forcing more
than 60,000 people to flee their homes. From Yemen, the Houthis fired both
on Israel, in one case sending an armed drone as far as Tel Aviv, and on
shipping passing through the Red Sea, in effect blockading the port of Eilat.
Smaller militias in Iraq and Syria chipped in with the odd attack on Israel.

But as the bloody year draws to an end, Iran’s friends are on the ropes.
Although thousands of Hamas fighters remain in hiding in Gaza, they are in
guerrilla mode. The group’s command structure has been smashed, leaving it
incapable of orchestrating elaborate attacks. The Houthis’ income has been
cut along with the flow of goods through Hodeida. Above all, Hizbullah, the
most fearsome of all Iran’s proxies, is reeling. Through a campaign of
sabotage and bombing, Israel has killed or injured not only most of its senior
leaders, but also lots of its mid-level commanders. Israeli intelligence
estimates that air strikes have destroyed at least half of Hizbullah’s massive
stockpile of Iranian missiles. Israel now has troops on the ground in
Lebanon seeking out the remainder of Hizbullah’s arsenal. In spite of the
ferocity of Israel’s assault, Hizbullah has responded by launching only a
handful of missiles towards Israel’s big cities, presumably because it is too
incapacitated to do more.

In short, the threat to Israel from Iran’s proxies has been dramatically
reduced. As a result, Iran’s chief means of deterring an Israeli attack—that it
would get its allies to pound Israel in return—no longer applies. What with
Israel’s demonstrated ability to evade and destroy Iran’s air defences and its
obliteration of Iran’s missile barrage, it has much less to fear than it did a
few months ago.

One of the few remaining obstacles to ferocious Israeli retaliation against

Iran is the hesitation of its closest ally, America. Mr Biden has condemned
Iran’s attack and declared that Israel has a right to defend itself. Jake
Sullivan, the national-security adviser, has promised “severe consequences”
for Iran. But Mr Biden has also said that Israel’s response should be
“proportionate” and specifically opposed the idea of an attack on Iran’s
nuclear facilities.

America the meek

Yet one of the recurring themes of the past year has been America’s apparent
inability or unwillingness to restrain Israel, which has repeatedly and openly
ignored American officials’ requests, without repercussion. Less than a
month ago Mr Biden’s lieutenants warned that there was no “magic
solution” to Israel’s conflict with Hizbullah and that a full-blown war would
be “catastrophic”. Soon afterwards Israel began its campaign of
assassinations and air strikes. Mr Biden then called for a three-week
ceasefire, but was humiliated by Mr Netanyahu, who said in private that he
was open to the idea only to reject it in public. Days later, when Israel killed
Hassan Nasrallah, Hizbullah’s leader, Mr Biden said he had not been briefed
in advance. Nonetheless, he blessed the operation, but urged Israel not to
proceed with a ground invasion. Israel went ahead anyway, and the
Americans now say they are fine with an offensive so long as it remains
small in scope.

America’s apparently limitless indulgence of Israel has also been on display

in Gaza, where Mr Netanyahu has repeatedly rebuffed Mr Biden’s frequent
calls for a ceasefire, more humanitarian aid and a plan for after the war. Arab
diplomats are flabbergasted: the president and his aides, they marvel, must
be extremely gullible or alarmingly dissembling. Either they naively accept
endless hollow pledges from Mr Netanyahu or they secretly agree with his
goals even as they insist otherwise.

In fact, the explanation for America’s diffidence is probably more

complicated than that. For one thing, Mr Biden’s aides are divided. Some
probably do agree with Israel’s tactics, even if there is broad support among
American diplomats for a tougher line. What is more, policy on Israel has
become enmeshed in American domestic politics. Mr Biden’s administration
both wants to ward off criticism from the right that it is siding with terrorists
against a close ally and at the same time demonstrate some friction with
Israel, not least because it worries about the political consequences in
Michigan, a swing state with a big Arab population, of too close an embrace
of Mr Netanyahu. Either way, Mr Netanyahu has shown himself willing time
and again to ignore America’s objections.

But even if Israel has Iran and its allies on the defensive, and is unlikely to
be restrained by America, its ever-expanding war may still go wrong. For
one thing, there is no guarantee that an Israeli attack on Iran’s nuclear
programme would succeed. Israeli insiders, in their more candid moments,
admit that the chance to set it back significantly with air strikes may have
passed: the relevant facilities are too deeply buried and nuclear know-how
too widely dispersed. Bombing might hold Iran up for only a few months,
some speculate.

What is more, there are limits to what a country of 10m, already straining
from a year’s war on multiple fronts, can do. Two of the Israel Defence
Forces’ six combat divisions are deployed in Gaza. They are skirmishing
with Hamas fighters and destroying parts of the intricate tunnel network
under Gaza. Two further divisions are already involved in the ground
campaign in Lebanon, and more are poised to join.
Although Israel insists its campaign in Lebanon will be “limited”, past
operations there have tended to balloon. The IDF has instructed residents to
leave dozens of towns and villages across southern Lebanon and to move
beyond the Awali river, some 60km north of the border. “Lebanon is a vortex
that has swept us in before,” warns Tamir Hayman, a former IDF general and
the head of the Institute for National Security Studies, a think-tank in Tel
Aviv.

To maintain its current level of deployment the IDF has had to call up tens of
thousands of reservists, many of them for three lengthy stints of duty since
October 7th. Some nonetheless complain that the IDF lacks sufficient
manpower. “We don’t have enough men or tanks to carry out a large
operation in Lebanon,” says a reserve officer who has been called up. “And
whatever they’re saying in public, it’s clear that this is what is being
planned.”

The ongoing war is also harming Israel’s economy. GDP is still shrinking year-
on-year and in recent days two rating agencies, Moody’s and Standard &
Poor’s, have downgraded Israel’s government debt. The prolonged absence
of so many reservists is hurting businesses of all sorts. Railway stations have
been forced to shut down for lack of security guards.
Mr Netanyahu has promised Israelis “complete victory”, but has not defined
what that means with respect to Gaza, much less Lebanon or Iran. Just
before the Iranian missiles hit on October 1st, two Palestinians from the
West Bank city of Hebron killed seven people and injured 16 in a stabbing
and shooting spree at a commuter-rail station in Jaffa, to the south of Tel
Aviv. Mr Netanyahu may believe Israel’s future hinges on the defeat of
distant foes like Iran, but however that conflict goes, Israelis and
Palestinians will still be living cheek-by-jowl. Even this most tumultuous of
years has not changed that. ■

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fast-expanding
Briefing | The great mistake

What Hamas misunderstood about the Middle

East
A war meant to draw in the militant group’s allies has instead left them
battered
October 2nd 2024

PERHAPS IN HIS final days he reflected on the irony. Last year Hassan
Nasrallah had not been eager to start a war with Israel. Hizbullah’s leader
felt dragged into it by Yahya Sinwar, the head of Hamas in Gaza, who had
declined to consult his allies before his men attacked Israel on October 7th.
But Nasrallah joined the war anyway: his own rhetoric left him little choice.
Almost a year later, that decision would cost him his life.

His assassination on September 27th was among the most momentous events
in a momentous year. The worst massacre in Israel’s history led to the
deadliest war in Palestinian history, Iran’s first direct attacks on Israel, even
the first time in any war that missiles had been intercepted in space. None of
this would have happened without Mr Sinwar’s fateful decision last October.
That is not to say the region would have been at peace—but this particular
sequence of events would have been unthinkable had Hamas not killed more
than 1,100 Israelis. Mr Sinwar wanted a cataclysmic war that would reshape
the Middle East, and he got one.

More on this:

The year that shattered the Middle East

The bloodshed in the Middle East is fast expanding
A year on, Israeli society is divided about the lessons of October 7th
Has the war in Gaza radicalised young Palestinians?
Read all our coverage of the war in the Middle East

But in many ways it has not gone to plan. Gaza is in ruins. Hamas is
battered. Hizbullah has lost its leader, its military command and its
reputation for competence, while Iran feels vulnerable. There has been
almost no sustained and spontaneous protest in the Arab world. No regimes
fell, wobbled or cut ties with Israel. Even the economic consequences have
been limited. The price of Brent crude is $10 lower than it was the day
before Hamas attacked Israel, regional war be damned.

Mr Sinwar went to war with two assumptions: that he would enjoy the
support of a strong and united “axis of resistance”, a constellation of pro-
Iranian militias; and that Israel’s conduct would inflame and mobilise the
region. Those beliefs were shared by many Arab, Israeli and Western
officials.
The Hamas leader would have had good reason to expect help from Iran and
its proxies. For years Nasrallah had promoted what he called the “unification
of the arenas”, the idea that Iran-backed militias had forged a tight alliance
and would co-ordinate to fight together against Israel and America. Battle-
hardened from years of combat in Syria, Hizbullah would be primus inter
pares. Israeli strategists were convinced by such talk. They warned that a
“ring of fire” was encircling their country.

Yet when it came time to test the idea, Nasrallah was hesitant. An
overwhelming majority of Lebanese, including around 50% of his Shia
constituents, opposed going to war to support Gaza. Nor were his Iranian
patrons enthusiastic. Hizbullah’s arsenal was supposed to be preserved as
their shield against a possible Israeli attack; they did not want to jeopardise
that arsenal in order to protect Hamas.

The reluctant ally

Nasrallah settled for a half-measure, a campaign of short-range missile fire
that depopulated a slice of northern Israel but failed to halt, or even slow,
Israel’s war in Gaza. It was hardly the full-throated support that Mr Sinwar
expected. When Hamas officials met their Iranian sponsors in the weeks
after October 7th, they complained about the lack of help.
The Houthis in Yemen were more eager to join the fight, but they had their
own limitation: distance. Hizbullah could threaten to saturate Israel’s air
defences with short-range missiles and send its elite militants across the
border. The Houthis could hit Israel directly only with a small stockpile of
missiles and slow-moving drones with the range to fly 2,000km to their
targets. Those can still be deadly, like the drone that hit a Tel Aviv apartment
block in July, killing one person and wounding eight more. But they are
hardly enough to sway the course of a war.

Iran and its proxies were victims of their own hype. For all their talk of
unity, the “axis of resistance” is a network of disparate militias that operate
out of failed or failing states. The past year has shown that they do not share
the same interests, and that many have only a limited ability to wage a long-
distance war. That leaves Iran in an uncomfortable position. The militias
were meant to fight on its behalf—allowing Iran to stay out of direct conflict
with Israel. Yet now the Islamic Republic feels compelled to fire ballistic
missiles at Israel to avenge attacks on those militias, a step that will surely
invite Israeli retaliation. Its shield has become a liability.

If Hizbullah was an immediate disappointment, it still seemed, in the early

days of the war, as if another of Mr Sinwar’s predictions would come true.
On October 17th medics in Gaza said that an Israeli air strike had killed
almost 500 people at a hospital. Within hours, it became clear that those
claims were false: the blast was probably caused by an errant rocket fired by
a Palestinian militia, and the death toll was considerably lower.

By then, however, the news had already sparked big protests in Jordan,
Lebanon, Tunisia and the occupied West Bank. Even the United Arab
Emirates (UAE), Israel’s closest ally in the region, felt compelled to issue a
sharp rebuke. It felt as if the Middle East was about to boil over. Arab and
Western diplomats spent the night fretting about regional stability and
wondering if they would need to try to restrain Israel.

Yet the streets were clear the following morning—and they never really
filled again. In the months to come there would be remarkably few protests
anywhere in the Arab world. Before Ramadan began in March, members of
Hamas said that Mr Sinwar was counting on a wave of religiously inspired
riots to pressure Israel. He was disappointed: the holy month was largely
uneventful.

Keyboard warriors
That is not to say Arabs have lost interest in the Palestinian cause: Israel’s
conduct in Gaza is still a source of widespread fury. But it has not inspired
the unrest it did in years past. Arab states have become more ruthless about
suppressing dissent and no longer view pro-Palestine protests as a useful
safety-valve for public anger. Posting on social media is displacing activism
on the streets. Moreover, some people abhor Israel’s actions but find it
impossible to support Hamas, an Islamist group backed by Iran. Most of all,
though, there is a deep sense of fatalism. After the traumatic decade that
began with the Arab spring in 2011, people are too exhausted and resigned
to protest about anything.

All this has made for an odd paradox: Arab states have been bystanders to an
Arab-Israeli war. They denounced Israel’s war in Gaza but did not sever ties
with the Jewish state, nor did they try to apply serious diplomatic or
economic pressure on its Western backers. At the same time, they were
desperate to avoid any confrontation with Iran, even when its proxies caused
them real harm. So far this year Egypt has lost around $6bn in revenue from
the Suez canal, more than half of what it expected to earn, because of Houthi
attacks on commercial shipping in the Red Sea. Its response has been to
shrug. Jordan was almost apologetic when it shot down Iranian drones that
violated its airspace in April, lest anyone think it was siding with Israel.

Saudi Arabia and the UAE, the most influential Arab countries, have found
themselves juggling a range of contradictory feelings. They worry that
Israel’s actions in Gaza will stoke religious fundamentalism in the region—
but they also see Hamas as a fundamentalist group that should be extirpated.
They are happy to see Iran and its proxies brought low, but are nervous that
a widening conflict would reach their shores. In public they call for a
ceasefire; in private they fret about a deal that would strengthen their
enemies.
For almost a year these forces combined to produce a sort of stasis. The war
stayed largely confined to Gaza and a narrow strip of land along the border
between Lebanon and Israel. Life was intolerable for 2m hungry, displaced
Gazans, and miserable for hundreds of thousands of displaced Israelis and
Lebanese.

The rest of the region could seem deceptively normal. Until August it was
possible to sit by the beach in Lebanon and pretend that Israel and Hizbullah
were not bombing each other a few miles away. (Thousands of Lebanese
expats returned and spent their summer holidays doing just that.) A war that
was meant to reshape the Middle East instead ground into a localised
stalemate, and it was possible to imagine that it would end with a return to
the status quo ante.

Winds of change
The events of the past month seem to have put an end to that stalemate. In
Lebanon the decapitation of Hizbullah, a militia-cum-political party, offers a
chance to loosen its stranglehold on politics. A good place to start would be
for parliament to select a president, filling a post that has been vacant for
two years because Hizbullah and its allies insisted on choosing a crony. That
vacancy has made it impossible for Lebanon to appoint a new government or
fill key security posts.

Choosing a president could happen only with the assistance of Nabih Berri,
the longtime speaker of parliament. Both an ally and a rival of Hizbullah—
they compete for support among the same Shia constituency—Mr Berri
insists that he will not convene lawmakers for a vote until the war ends.
Perhaps this is because even a weakened Hizbullah may still be too strong a
force for other Lebanese factions to challenge, especially if it regains a
measure of popular support for fighting the Israeli ground invasion.

In neighbouring Syria, Bashar al-Assad sees an opportunity. Although he

owes his survival to Hizbullah, which sent fighters to prop up his blood-
soaked regime in 2012, he kept mum last month as Israel hammered the
group. It took him two days after Nasrallah’s assassination to issue a
lukewarm condolence. Instead he is reaching out to Gulf states and hinting
that he might distance himself from Iran. Scepticism is warranted: Mr
Assad, like his father, is adept at playing off all sides against each other. But
he hopes the mere promise of backing away from a diminished Iran will ease
his global isolation.

A decade ago, Gulf states might have been eager to try to steer the Levant in
a new direction. But today’s monarchs are less interested in playing in this
region’s politics, especially when it requires sending billions of dollars in
aid. The Saudis have largely written off Saad Hariri, a former prime minister
and once their main client in Lebanon, as a lost cause, too weak and
unpopular to lead the country.

They will be even more reluctant to get involved in any fighting, whether as
part of a peacekeeping force in Lebanon—an idea that some Western
diplomats have mooted—or as part of a coalition against Iran. Some media
outlets linked to Iran’s Islamic Revolutionary Guard Corps have already
suggested that it might attack Gulf states in retaliation for possible Israeli or
American strikes on Iran’s oil facilities. That may well be an empty threat,
since it would almost certainly invite a fierce American-led strike in
response. Even so, the Saudis and Emiratis will be rather hesitant about
calling Iran’s bluff.

Policymakers in America and Israel are already crowing about the chance to
craft a new Middle East. The region is hard to change, though—and it rarely
changes for the better. Gulf states fear they will wind up being soft targets
for a cornered Iran. And they see little upside in taking such risks. In a
speech last month Muhammad bin Salman, the Saudi crown prince, said that
the kingdom would not recognise Israel until the Palestinians had a state. It
was the first time he made such a declaration. Prince Muhammad does not
care much for the plight of the Palestinians; that he felt compelled to
distance himself from Israel is a sign of the risk-averse mood across the
Gulf.

Moreover, it is plain to see that Lebanon’s ossified sectarian politics may

prove hard to reform and that Syria’s cynical dictator is showing no sign of
changing his ways. Other countries in the region, such as Egypt and Jordan,
are too weak to exert much influence. Even at such a dramatic moment, the
Arab states may remain mere bystanders to history. ■
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middle-east
Briefing | No common purpose

A year on, Israeli society is divided about the

lessons of October 7th
Hawks and doves, religious and secular, right and left—all the old
cleavages are resurfacing
October 3rd 2024

“WE HAVE RESTORED deterrence,” declares Amos Yadlin, a former head

of Israel’s military-intelligence service, referring to the credibility Israel’s
security services lost on October 7th, 2023, when Palestinian radicals ran
rampage across southern Israel, killing more than 1,100 people and
kidnapping some 250. This has been regained by Israel’s devastating assault
on Hizbullah, a Lebanese militant group that has been bombarding northern
Israel for the past year, displacing some 60,000 civilians. In just two weeks
Israel has killed and injured many Hizbullah operatives using booby-trapped
pagers and walkie-talkies, assassinated several of its leaders in bombing
raids and sent troops into southern Lebanon to destroy the tunnels, bases and
rocket-launchers Hizbullah has been using in its attacks.

Whereas Israeli intelligence had little inkling of the plans of Hamas, the
Palestinian militant group that spearheaded last year’s attacks, it had
thoroughly penetrated and outwitted Hizbullah. Whereas the mastermind of
Hamas’s attacks, Yahya Sinwar, remains at large despite Israel’s year-long
war against Gaza, from which the attacks were mounted, Hassan Nasrallah,
Hizbullah’s leader, was killed by an Israeli bomb on September 27th.
Whereas 97 of the hostages seized by Hamas and other militant groups on
October 7th remain unaccounted for 11 months after Israel sent troops into
Gaza in part to rescue them, the war against Hizbullah seems likely to
reduce attacks on northern Israel—at least for a while—and thus allow
residents to return safely to their homes. Most notably, neither Hizbullah nor
its backers in Iran have succeeded in causing many casualties in their
various attacks on Israel, including Iran’s barrage of 180 missiles on October
1st, in contrast with the massacres that took place on October 7th. Fully 80%
of Israelis support the assault on Hizbullah, according to a poll
commissioned by the Israeli Democracy Institute, a think-tank.

More on this:

The year that shattered the Middle East

The bloodshed in the Middle East is fast expanding
What Hamas misunderstood about the Middle East
Has the war in Gaza radicalised young Palestinians?
Read all our coverage of the war in the Middle East

Yet as pleased as most Israelis are by the campaign’s success, the unity is
only superficial. Israelis remain divided not just over the way forward in
Gaza, where the Israel Defence Forces (IDF) are still battling Hamas, but also
over the lessons of October 7th. Before the war began, Israel was riven by
protests over the right-wing government’s proposed reforms to the judiciary,
which many believed would have diminished checks on the government and
so weakened the rule of law. What is more, many Israelis blamed the prime
minister, Binyamin Netanyahu, for tolerating Hamas’s control of Gaza as a
way to undermine Palestinian unity and support within Israel for any form of
Palestinian autonomy. And as the war in Gaza has dragged on, many Israelis
have concluded that his government is more interested in prolonging the
fighting than it is in rescuing the surviving hostages.

Protesters and patriots

None of this has stopped Israelis from rallying around the flag and throwing
themselves into the war effort. During the protests against the judicial
reforms, many reservists, including 37 out of the 40 pilots in Air Force
Squadron 69, threatened to suspend their military service. In the end the
reforms got stuck in parliament and the courts and reservists have reported
for duty as required. It was Squadron 69 that bombed Hizbullah’s
underground headquarters in Beirut, killing Nasrallah.

Yet the war is lasting far longer than almost anyone anticipated. In the first
weeks after the war began three-quarters of Israelis told a pollster it would
take no longer than three months. Only 1.6% thought it would go on for over
a year.

At one of the two divisional headquarters directing the IDF’s ground

operations in Gaza, the feeling of urgency of the first months of the war is
long gone. Soldiers sunning themselves outside the temporary offices in
portable cabins no longer carry helmets and flak-jackets, although Gaza is
only a few kilometres to the south. The constant missile fire has all but
evaporated, as the IDF has destroyed nearly all of Hamas’s launchers. Most
combat units have been redeployed to the north, near Lebanon. Gaza feels
like a sideshow.

“The battle isn’t over, but the bulk of the fighting is,” says one of the
division’s commanders. Inside Gaza, the main job of the IDF is to patrol two
corridors: one cutting it in half, which prevents the return of a million
displaced civilians to Gaza City, and the other along Gaza’s border with
Egypt, which prevents militants escaping and arms entering. Hamas’s
command structure has been dismantled but thousands of its fighters remain
at large, some mounting guerrilla attacks. The IDF cannot carry out big
offensives to hunt down these remnants since so much manpower has been
sent north. Most of the remaining troops’ time is spent protecting themselves
from ambushes, blowing up sections of Hamas’s tunnel network and
escorting humanitarian convoys.

One way to drum up more troops would be to draft more ultra-Orthodox

students, who are exempt from compulsory military service—something the
Supreme Court has instructed the government to do anyway. Some 60,000
ultra-Orthodox men could in theory be eligible. But an attempt by the IDF to
call up a few thousand of them led to rioting outside draft offices. The ultra-
Orthodox parties in Mr Netanyahu’s coalition have threatened to topple the
government if he presses ahead with such a policy.

The current situation in Gaza is “stagnation”, a general complains. “No

alternative force has been prepared to take over Gaza and meanwhile Hamas
is recovering in parts of the strip,” says another officer. “We knew it was
going to be a marathon, but not an ultra-marathon,” sighs the divisional
commander, a reservist who, in civilian life, is joint CEO of a finance company
which he is struggling to keep going owing to the number of employees on
military duty like himself.

Mr Netanyahu speaks vaguely of a “demilitarised” and “deradicalised”

Gaza, without specifying what that means or how it will be achieved. The
far right, on which his government relies, would like to see a permanent
occupation, of the sort that pertained before Israel’s withdrawal in 2005. The
centre-left would prefer that Gaza be administered by the Palestinian
Authority, which runs parts of the West Bank, with the support of Arab
states.

The prime minister rules out both of these options. To the consternation of
America and his own generals, he has refused to accept a ceasefire
agreement that would allow the release of the surviving hostages, fuelling
speculation that he prefers to keep the war in Gaza simmering, so that he can
put off the moment of reckoning with Israeli voters.

Mr Netanyahu seems to hope that the campaign against Hizbullah will help
restore his political fortunes. Although the polls have long indicated that
more than 70% of Israelis would like him to resign, either immediately or
once the war is over, he has clung doggedly to power. He has refused to take
any blame for the failure to anticipate and prevent the massacre of Israeli
civilians, and has instead promised “total victory”. Although his Likud party
has recovered somewhat in the polls (mainly at the expense of his far-right
coalition partners), Mr Netanyahu’s coalition would probably lose its
majority if elections were held now. That likelihood, ironically, has helped
keep him in power, since his allies do not want to risk their own jobs by
precipitating an election.

Mr Netanyahu is also helped by the lack of an obvious successor. The

official leader of the opposition and previous prime minister, Yair Lapid, a
centrist, has failed to articulate a clear alternative to Mr Netanyahu’s policies
and is languishing in the polls. For much of the past year Benny Gantz,
another centrist and former commander of the IDF, seemed the most plausible
candidate. He joined a national-unity government days after October 7th and
was considered by many to be a voice of reason. But he left the government
in June, complaining that Mr Netanyahu had no plan to end the war. Since
then his ratings have also declined. The most popular candidate according to
the polls is Naftali Bennett, a right-winger who led a short-lived government
after toppling Mr Netanyahu in 2021. But he has yet to set up a planned new
party.

Michael Ohayon, a grizzled butcher from northern Israel, captures Israelis’

mixed feelings about Mr Netanyahu. Having fled Hizbullah’s rocket attacks
last year, he is now living in a hotel in the coastal city of Haifa. On a recent
evening, shortly after Hizbullah fired missiles at Haifa, too, he said, “Of
course we blame Netanyahu for the situation Israel is in. But who else do
you see who can replace him?”

Still processing
A year after October 7th Israelis are still trapped in a vortex of sadness,
anger and recrimination. Nightly news programmes still devote lengthy
segments to Hamas’s atrocities, as new details continue to emerge.
Politicians frequently compare the massacre to the Holocaust.

This anguish, in turn, has inhibited public debate about how the wars in
Gaza and Lebanon are being prosecuted and how they might be brought to
an end. “The trauma is too fresh among Israelis, on the centre-left as well,
for us to have a discussion now on peaceful solutions to the conflict. The
levels of rage are still too high,” admits Mickey Gitzin, the head of the New
Israel Fund, a progressive NGO which has directed funding to Israeli
communities affected by the war, as well as humanitarian relief to Gaza.

A two-state solution, he admits, has become a non-starter for most Israelis.

But polling his organisation commissioned shows an openness to enlisting
the help of Arab countries such as Saudi Arabia in some alternative
arrangement. “We’re not at a point right now to talk of a Palestinian state,
but there is an opportunity. The right wing’s concept of ‘managing the
conflict’ collapsed on October 7th and our responsibility is to present
Israelis with a way forward.” “Israel had a chance to emerge from the war in
Gaza with a more stable regional framework in which the Saudis and other
moderate Arab states would have been invested in maintaining the security,”
echoes Tamir Hayman, a former general and head of the Institute for
National Security Studies, a think-tank in Tel Aviv. “That opportunity was
squandered because of politics.”

Zeev Raz, a retired colonel and former commander of Squadron 69, believes
that Nasrallah’s assassination has made Israel safer. In 1981 he led an air
raid that destroyed an Iraqi nuclear reactor, which Israel feared would be
used by Saddam Hussein’s regime to develop nuclear weapons. But today he
believes the greatest threat to Israel is not Iran’s nuclear-weapons
programme, but Israel’s inability to engage with the Palestinians. “So now
we’re euphoric that we’ve eliminated Nasrallah and we’re ignoring the mess
we’ve got ourselves into in Gaza,” he says. “Israel is still in an illusion that
we can somehow manage the conflict with the Palestinians while we deal
with Iran and its proxies.” ■

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about-the-lessons-of-october-7th
Briefing | The Palestinians’ future

Has the war in Gaza radicalised young

Palestinians?
After Gaza, how will the Palestinians try to build their state?
October 3rd 2024

Among the banks, law firms and luxury hotels of central London, a piece of
Palestine is rising. Born in an adjacent falafel joint, Palestine House has
spread over five floors. Each depicts a different period of Palestinian history.
The walls of one recreate the wooden latticework of a traditional inner
courtyard; another, the smashed rubble of Gaza. Palestinian flags and
banners protesting against genocide decorate the walls and pavement
outside. By the end of the year Osama Qashoo, its founder, plans to open a
journalists’ club, a radio station, a startup hub, an exhibition hall and a
cultural salon in the building. “Each bomb Israel drops on Gaza is an
amplifier,” says Mr Qashoo, an exile from the West Bank city of Nablus:
“We are the carriers making sure Palestine’s story lives.”
Mr Qashoo is part of a new generation of activists among Palestinians whose
sense of identity had been waning. They have been mobilised by the
horrifying bloodshed and destruction in Gaza. They are dismissive of an
ageing and discredited Palestinian leadership and seek new ways to pursue
their century-long struggle. Mr Qashoo’s vision of the route to a Palestinian
state is a peaceful one. Others sound more resigned to bloodshed. “Forget
the dumb doves,” says Zeina Hashem Beck, a young poet at a recital in
support of Gaza in New York. Will the war in Gaza galvanise young
Palestinians to new forms of struggle, or prompt further violence in their
quest for a state?

More on this:

The year that shattered the Middle East

The bloodshed in the Middle East is fast expanding
What Hamas misunderstood about the Middle East
A year on, Israeli society is divided about the lessons of October 7th
Read all our coverage of the war in the Middle East

The horrors of the past year are manifold. Nearly 42,000 have been killed in
Gaza. Around 70% of Gaza’s housing stock has been destroyed. Many feel
that the shock is already as awful as the nakba (catastrophe) of 1948, when
Israel was formed and around 15,000 Palestinians were killed and some
750,000 were driven from their homes or fled. Others compare it to the
naksa (setback) of 1967, when Israel seized the West Bank and east
Jerusalem. Measured by the numbers killed and the length of the conflict,
the past year has been the worst in the Palestinians’ recent history.

Israel again controls the lives of all 7m Palestinians in the land that was their
ancestral home. In Gaza 2.2m Palestinians are as disorientated and fearful as
they were in 1948. Polling by Zogby, a research firm, suggests that over half
of Gaza’s people have lost a relative and some three-quarters have been
displaced at least three times during this war.

West Bankers liken their situation to that of pre-war Gaza. Checkpoints keep
them locked under siege and shut out of Israel’s labour markets. Strikes by
drones, common in Gaza, frequently occur. Jewish settler violence has
increased sharply since October 7th.

Meanwhile Israel’s Arabs risk being reported to the police for empathising
with their brethren in Gaza. When a 12-year-old Palestinian girl at a
Hebrew-language school in Beersheva, in southern Israel, fretted about
starving children in Gaza, her classmates threatened to burn her village. The
education ministry accused her of incitement against the army and her
headmistress suspended her. “We’re fuming, but they make you think a
thousand times before you open your mouth,” says an Arab politician in
Haifa, an Israeli city often hailed as a model of co-existence.

With Palestinian voices muzzled by Israel, Palestinians who live abroad, half
of the overall 14m-strong population, are shaping their national struggle.
The 1m-odd who live in the West and Latin America see their role as
responding there to the Palestinians’ plight. Michigan, an American state
with a large Arab electorate, is a swing state in America’s presidential
election. The diaspora is trying to reshape how people think of the conflict.
As the peace accords signed in Oslo in 1993 slip into history, Palestinians
are seeking to replace the idea of a clash between two national movements
with a generational liberation struggle against “settler colonialism”.

Vain hopes are like certain dreams

At first, Palestinians hoped that this war, like previous conflicts in Gaza,
would end swiftly. Western allies of Israel would force it into a ceasefire.
Gaza would be rebuilt. Israel’s prime minister, Binyamin Netanyahu, would
fall. And the world might finally impose a two-state settlement, as they
promised in the first weeks of the war. Palestinians in the West Bank and
Israel hunkered down in anticipation.

A year on, that hope has faded. There has been no truce. Western
governments have not forced Israel to relent. Iran and its proxies vowed to
come to Gaza’s rescue. But Israel has smashed Hamas and Hizbullah, and
may clobber the Islamic Republic. Israelis show no sign of replacing Mr
Netanyahu and his cabinet that includes Jewish supremacists. Many
Palestinians fear that the displacement and hellfire in Gaza is a forerunner of
the plans Israel’s settlers and its army have for the West Bank. They feel “an
existential threat”, says Omar Dajani, a Palestinian-American in Jerusalem.

Perhaps driven by the desire for a safe haven, the war has consolidated
support for a Palestinian state. A Palestinian poll in September put support
for a state based on the borders of 1967 at 60%, compared with 10% who
backed a single state with equal rights for Jews and Palestinians. Mr Dajani,
who is the Palestinian representative abroad of A Land For All, which
champions a confederation of a Jewish and Palestinian state with open
borders, says Palestinian (but not Jewish) support for the movement has
collapsed over the past year. He worries he will be ostracised as “a
normaliser”. “It’s hard to imagine a rosy future with those who slaughtered
your friends and family,” he concedes.

Palestinians seem even more divided about how to achieve statehood. For
some, resistance can be peaceful. They see it in their determination to stay
put. Palestinians have remained in their villages in northern Israel, even as
Hizbullah has bombarded the area with rockets and Jewish Israelis have
been evacuated. “There’s always this fear,” says Ghousoon Bisharat, the
editor of +972, a joint Israeli-Palestinian magazine based in Haifa, “that if
you leave, you don’t know if you’ll be allowed back.” Others see it in the
celebration of merely being alive. “Drinking this beer is an act of
resistance,” says a 29-year-old tattooed Palestinian bartender, who left Jaffa
in Israel for Ramallah, the Palestinians’ seat of government in the West
Bank.

But violence is also regaining its appeal. “This Israel understands nothing
else,” says one Palestinian who founded a civil-disobedience movement two
decades ago but has since lost faith in a peaceful approach. Contrary to
Israeli claims that force will beat Palestinians into submission, survey after
survey shows the reverse since Israel invaded Gaza. In a poll conducted in
the West Bank by the Jerusalem Media and Communication Centre, support
for “military resistance” grew from 40% in May this year to 51% in
September, whereas support for “peaceful political action” fell from 44% to
36% in the same period. A pollster in Ramallah has similar figures: support
for violence in the West Bank grew from 35% in September 2022, when Yair
Lapid was Israel’s prime minister, to 56% in September this year. The
pollsters say that shift is most pronounced among Palestinians who are too
young to remember the costs of the second intifada (uprising) and past
Palestinian wars.

Hamas is the beneficiary. In a rare flash of democracy in the West Bank,

support for their programme of military confrontation versus the preference
of the Palestinian Authority (PA) for negotiations and engagement helped
them win student elections last year in Bir Zeit and Hebron Universities in
the West Bank. Hamas’s ability to continue to inflict casualties on the
region’s most powerful army, waging its longest war, has bolstered its
support. In Jordan last month the group’s sister organisation, the Islamic
Action Board, emerged as the largest party in a general election, with 22%
of the seats. According to one poll, support for Hamas in the West Bank and
Gaza has grown from 22% last September to 36% a year on.

Many who back Hamas seem aware of the consequences. “Most of my

friends will be killed,” says a young resident of Jenin camp in the northern
West Bank, despairingly. In August Hamas in the West Bank conducted its
first suicide-bombing inside Israel in years. “People want to be martyred not
because they get a load of virgins in paradise, but because they want to make
their families and parents proud,” says a student leader in Nablus.

How much of the professed support for Hamas remains lip-service and how
much a true commitment to perpetrate attacks is hard to tell. Many young
Palestinians boast of their willingness to join the fight but pass their days in
cafés doing little more than watching Hizbullah’s promises to destroy Tel
Aviv, broadcast on a loop by Al Jazeera, a seductive Qatari television
channel. The eschatology of jihadism has not made a comeback; young
Palestinians are less likely to support a sharia state than their parents are.
And some Palestinians counsel against the futility of violence: each round
provides a pretext for Israel to grab more territory, warns Maqbula Nassar, a
journalist in Nazareth, the largest Arab city in Israel. There are reasons for
Palestinians to eschew bloodshed. Despite the surging violence in the West
Bank, many still have much to lose.

Still, few Palestinians doubt that a violent backlash is coming. As Iran was
bombarding Israel with missiles on October 1st, at least seven people were
shot and killed in Tel Aviv. Hamas has claimed responsibility, saying that the
attackers were from Hebron in the West Bank. The Palestinians have no
effective government. Hamas’s days as an authority in Gaza seem over. A
similar uncertainty hangs upon Mahmoud Abbas, the 88-year-old Palestinian
president. And unlike their parents, most young Palestinians have no
factional allegiance. In the coming months the PA could find it harder to
control what little of the West Bank it still oversees, as settler and army
attacks intensify and Palestinians retaliate. Without the political will to end
it, few expect this cycle in the Israeli-Palestinian conflict to be the most
lethal—or the last. ■

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young-palestinians
United States
Crypto bros v cat ladies: gender and the 2024 election
A ports strike shows the stranglehold one union has on trade
Tim Walz is the most popular candidate on either ticket
Many Americans can decide their own policies. What will they choose?
Hurricane Helene was America’s deadliest storm in nearly two decades
The US Army’s chief of staff has ideas on the force of the future
The vice-presidential debate was surprisingly cordial
United States | Voting and victimhood

Crypto bros v cat ladies: gender and the 2024

election
How the campaigns are exploiting and reshaping the battle of the sexes
October 3rd 2024

In a brewery in Pittsburgh’s East End, six guys lounged on barstools talk

about brawls and about women. “We can’t stand by, we’ve got to get in the
fight,” says one. Another adds that as a husband it is natural to “go into
defence mode” when his wife is under attack. The others nod vigorously.
“The government should not be in the business of putting their hands on
women’s wombs,” he concludes, to loud applause—and some spilled beer—
at the tables around them.

This “manel” at East End Brewing, on September 20th, is one of many stops
on the “Reproductive Freedom Bus Tour”. The six men—a doctor, a social
worker, a representative, two Hollywood actors and a man whose wife
nearly died of sepsis due to Texas’s abortion ban—are here to urge men to
vote Harris. They talk about wanting to be good role models to their sons
and win back rights for their daughters.

Keep up with the contest between Kamala Harris and Donald Trump with
our US election forecast model

This strain of masculinity was on display at the Democratic National

Convention (DNC) in August. It was a sharp contrast with the Republican
National Convention, where Donald Trump walked on to “This is a man’s
world” and Terry Gene Bollea, better known as Hulk Hogan, a retired
wrestler, ripped off his shirt and called the former president a “gladiator”.

The 2024 election is a gendered election, and not just for the obvious reason
that a man is running against a woman. The parties are also telling very
different stories about gender. Americans are much more likely to believe
Kamala Harris would make things better for women and Mr Trump for men,
according to a recent poll by Pew. That reflects the fact that men and women
are, on average, growing apart in their political preferences. This trend
started in 1980, but the chasm has grown wider over the past 16 years. In
The Economist’s most recent polling with YouGov, men favour Mr Trump
by four percentage points and women Ms Harris by ten.

Presidential elections have long been masculinity contests, says Dan

Cassino, at Fairleigh Dickinson University. John Kerry had fun made of his
kitesurfing (too coastal to be truly manly), while George W. Bush was
photographed clearing brush at his ranch. The back-and-forth between Mr
Trump and Joe Biden, in their TV debate, about who had the bigger golf swing
was a low point in this type of mano-a-mano contest. But Ms Harris’s
declaration that if someone broke into her house “they’re getting shot” fits
into the genre too.

And presidenting is still seen as a manly occupation. Some 30% of

Americans think Ms Harris’s sex will hurt her chances of winning; only 8%
believe the same about Trump. In fact, her two X chromosomes should if
anything work in her favour. Several studies show that American voters, on
average, do not discriminate against a female candidate because of her sex.
According to a meta-study by Susanne Schwarz of Swarthmore College and
Alexander Coppock of Yale, voters (particularly if they are Democrats)
marginally favour hypothetical female candidates.

For a woman a presidential campaign is therefore a tightrope act. Subtle

references to gender can improve her chances of victory but anything too
overt has the opposite effect. Hillary Clinton liked to dress in white in 2016,
a nod to suffragettes, and spoke of the historic nature of her nomination. Ms
Harris avoids such references. Wisely so: polling suggests that men and
older women hate it.

Ms Harris is therefore downplaying her sex, while at times reinforcing

traditional gender roles: the DNC featured several references to her skills in the
kitchen. Meanwhile Mr Trump has doubled down on projecting traditional
masculinity. His defiant fist in the air after being shot in July was praised as
a display of manly strength. In an interview with Aidin Ross, an online
streamer favoured by young men, he talked about “taking out” Mr Biden and
telling Kim Jong Un that his red button was bigger than the North Korean
dictator’s.

Mars and Venus

Mr Trump is playing to voters with his not-so-subtle innuendo. In 2020
strength was the most important characteristic in a leader for 72% of
Republican voters, compared with 28% of Democrats. He is also shaping
their attitudes. Recent work by Mr Cassino found that men who identify as
“completely masculine” favoured Mr Trump by 30 points whereas those
who do not favoured Ms Harris by 20 points.

Dave Gehring, a 37-year-old veteran knocking on doors in a Pittsburgh

suburb for the Republican Party, is in no doubt why men like Mr Trump:
“He’s masculine.” Young men gravitate towards the former president, he
reckons, not just “because he’s cooler”, but because he is “still willing to
give young men the opportunity to go and earn that better job based on
merit, and take that strong male lead in a household”. As the father of a
daughter he does not think women should be attacked for their gender any
more than men, but warns that “young men in America are under attack by
the left every day.”
He is not alone in believing this. “There’s a growing divide in views about
how well men and women are doing in the US,” says Daniel Cox of the
American Enterprise Institute, a think-tank (see chart). Trump voters are
much more likely to believe that men are the basis of sex discrimination, and
the opposite is true of Harris voters. Nearly seven in ten Trump supporters
think Ms Harris’s policies will make things worse for men. The Trump
campaign hopes to make use of this sense of grievance among young men
who rarely vote. At a rally in New York last month Mr Trump concluded
with an unusual pep talk: “Harry, get your fat ass out of the couch, you’re
going to vote for Trump.”

Yet the changes on the right have been dwarfed by what has happened on the
left. Whereas in the Obama years the gap between young men and women
identifying as liberals was just five percentage points, during the Trump-
Biden years this has tripled to 15 points, according to Gallup. This change
has been caused almost entirely by young women moving to the left, rather
than young men tacking to the right. The fact that this generation’s formative
years were during the #MeToo movement, the Trump years and the decision
to overturn Roe v Wade helps explain it.

Republican candidates attempt a kind of chivalry, offering protection for

women and their families, rather than feminism. At a recent rally in
Pennsylvania, Mr Trump promised women he would be their “protector” and
save them from fear and loneliness. “You will no longer be thinking about
abortion,” he said. That is what Mr Gehring and his fellow Republican door-
knockers—who would rather talk about law and order and the economy—
are hoping.

Dividing the electorate based on sex is, of course, reductive. In 2020 a

majority of white women voted for Mr Trump; according to the latest
polling, that might turn into a minority in 2024, but only just. And although
the youth gender gap is wider than before, most young men still plan to vote
for Ms Harris.

Yet leading among women is a real advantage. Since the 1980s a greater
share of women than men has turned out to vote. In 2020 women made up
54% of the electorate. Whereas earlier this summer they were more likely
than men to be on the fence about whom to vote for, Ms Harris’s candidacy
has helped many off it. A final indicator that Democrats might be winning
this battle of the sexes: in battleground states, according to Target Smart, a
data firm, between July and September, twice as many young Democratic
women registered to vote than young Republican men.■

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United States | October surprise

A ports strike shows the stranglehold one union

has on trade
East coast longshoremen are already among America’s best-paid manual
workers
October 2nd 2024

“YOU’RE BETTER off sitting down and let’s get a contract,” said Harold
Daggett, head of the International Longshoremen’s Association, the dockers’
union, a few weeks ago. If not, he said, “I will cripple you.” This was no
empty threat. On October 1st dockers at 36 ports from Texas to Maine
walked off the job after their contract expired. The ports’ giant cranes, which
look like enormous metal giraffes, stopped loading and unloading. Ships that
did not get to port in time anchored off shore. A few headed to Mexico.
“We’re going to show these greedy bastards you can’t survive without us,”
said Mr Daggett on the first day of the strike.
The union has already disrupted the delivery of billions of dollars’ worth of
consumer goods during peak shipping season. About 60% of America’s
containerised trade is affected. The strike shut six of the ten busiest ports in
North America.

Ports, carriers, retailers, warehouses and freight companies prepared for

months for a shutdown. Ports on both coasts and the Gulf saw higher
volumes than usual because shippers were trying to get in as much stuff as
possible before the strike. “It was a huge rush for all truckers to move as
much freight on and off as they could,” says Donna Lemm of IMC Logistics, a
company with 2,200 trucks moving cargo in and out of terminals. In a single
day, “We have hundreds of containers stacked with four to five days’ worth
of work for our drivers to deliver.” Storage facilities are jam-packed.

If the strike lasts longer than a week or two, says Adam Kamins, an
economist at Moody’s Analytics, that will lead to shortages and price
pressures. He warns that even a modest increase in inflation could force the
Federal Reserve to be more cautious about lowering interest rates. Mr
Daggett told his union brethren that the strike—the first on the east and Gulf
coasts since 1977—could last as long as three weeks and that “We are going
to walk away with a great contract.”

Hi, Jerome
Talks between the dockers and the United States Maritime Alliance, which
represents terminals and carriers, broke down in June. At one point the union
wanted a wage increase of nearly 80%. The dockers rejected a nearly 50%
increase. According to the now defunct Waterfront Commission of New
York Harbour, more than a third in 2020 were paid $200,000 with overtime.
Dockers are among the best-paid blue-collar workers.

There are whispers that the two sides may not be too far apart on wages. The
bigger issue is the union’s biggest fear: automation. The container liners do
not want to concede too much on this. Peter Tirschwell of S&P Global Market
Intelligence notes the basic cost to lift a container off a ship is higher in
America than anywhere else in the world. Ports elsewhere are more
automated, cheaper and more productive (measured by the number of lifts
on and off a ship per hour). According to a container-port performance index
published by S&P and the World Bank, no American port is in the 50 most
productive ports. The highest-ranked American port is Charleston at 53. It is
no coincidence that Charleston is one of the less unionised.

For President Joe Biden the strike is awkward. His labour and transport
secretaries have been working the phones. Mr Biden has called on carriers,
which he points out are foreign-owned, to present a “fair offer”. He may be
the most pro-union president ever. He was the first in office to walk a picket
line, has said he does not believe in the Taft-Hartley Act, which would force
the union to work under protest for 80 days, and presents greater
unionisation as key to a healthy middle class.

That ardour is not reciprocated. The longshoremen have withheld their

endorsement from Mr Biden. And Mr Daggett seems to favour Mr Trump,
though he has not endorsed him either. He posed with the former president at
Mar-a-Lago and said Mr Trump shared the union’s opposition to automated
terminals. Many of the rank-and-file appear to be Trump supporters too,
even though Mr Trump recently said at a rally that he would get fresh
workers in rather than pay overtime. ■

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fast analysis of the most important electoral stories, and Checks and
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of American democracy and the issues that matter to voters.
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stranglehold-one-union-has-on-trade
United States | Running mate

Tim Walz is the most popular candidate on either

ticket
How much difference does that make?
October 1st 2024

Former president Donald Trump made an unusual foray into political

science in July, arguing that “historically, the vice-president, in terms of the
election, does not have any impact.” At the time, his running mate J.D.
Vance was stumbling through a gaffe-filled rollout, having been drafted two
weeks earlier. It seemed as if Mr Trump’s academic pronouncement was
only intended to comfort himself—but it may have some merit. The vice-
presidential debate did little to refute him (see Lexington).

Expectations were high for Minnesota’s Governor, Tim Walz, the running
mate of Democratic nominee Kamala Harris. The former high-school
teacher and football coach has a folksy persona and a credible claim to being
the most popular candidate on either ticket. In theory, this means the VP
debate was an opportunity for the Harris-Walz campaign to reach voters who
would not give Ms Harris a hearing. More likely, neither Mr Vance nor Mr
Walz substantially moved the dial. Snap polling found voters evenly divided
on the question of the debate’s winner.

Keep up with the contest between Kamala Harris and Donald Trump
with our US election forecast model
Read more of our coverage of the elections

Christopher Devine and Kyle Kopko, two political scientists who study the
effects of vice-presidential picks, find little evidence that running mates have
a substantial effect on vote choice. Most voters are focussed almost
exclusively on the top of the ticket, as Mr Trump suggested. But if the
former president has been reading their book, he may have skipped over a
less comforting finding—that the most substantive effect of the vice-
presidential pick is how it reflects on the nominee themselves. Republicans
will hope that Mr Vance’s debate performance reassured voters about Mr
Trump’s judgement.

In pre-debate poll ratings, there was a gulf between Mr Vance and Mr Walz
(see chart, which also illustrates Ms Harris’s surge in popularity on assuming
the Democratic nomination). Although the number of people with a
favourable view of Mr Walz outweighed the number with an unfavourable
view (by 4 percentage points), the opposite was true for Mr Vance (by 11
points). While Mr Walz outpaced his boss in net favourability, Mr Vance ran
slightly behind his. In fact, Mr Vance was the most unpopular vice-
presidential pick of recent history, according to analysis by FiveThirtyEight,
a data-journalism outfit. He was even less popular than Sarah Palin, Alaska’s
former governor and John McCain’s running mate in 2008, who has become
the textbook example of a bad pick.

Mr Walz’s high ratings could be explained to some extent by the number of

people who did not have any opinion of him before the debate. In polling
conducted by YouGov in September, an average of 8.9% of Mr Trump’s
supporters said they did not know if they had a favourable or unfavourable
opinion of the Democratic vice-presidential nominee, compared with 6.4%
of Ms Harris’s supporters of Mr Vance (see chart 2). But this also posed an
opportunity. Unlike in September’s presidential debate, a substantial number
of viewers saw the opposing party’s representative on stage without many
preconceptions.

A snap poll by CNN suggested that ratings of both debaters surged among
viewers, from net positive 14 to 37 percentage points for Mr Walz and net
-22 to -3 points for Mr Vance. It is too early to say whether this positivity
will extend to the broader electorate but it is unlikely to have much bearing
on the presidential race in either case. Both VP candidates are defined by their
association with the top of the ticket and, in Mr Walz’s case, the incumbent
president, Joe Biden—who is more unpopular than either set of nominees. If
they lose in November, both Mr Walz and Ms Harris can blame their boss. ■

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United States | Taking the initiative

Many Americans can decide their own policies.

What will they choose?
Three issues will dominate state ballot measures in November
October 3rd 2024

“I WANT YOU to pick a sport to award $1m to,” Sondra Cosgrove tells her
audience. Ms Cosgrove, a community-college professor, is trying to teach
Nevadans how ranked-choice voting (RCV) works. The five sports with the
most votes in the first poll (the primary) advance. In the second poll (the
general election) basketball wins more than 50% of votes in the first round,
eliminating the need for a run-off. If no sport had won more than half of the
votes, the last-place finisher would be eliminated and their votes reallocated
based on how participants ranked them. This process would repeat until a
clear winner emerged.
Ms Cosgrove hopes the illustration will help voters understand a measure on
the ballot this November that would amend Nevada’s constitution to allow
the adoption of RCV and open primaries, where all candidates regardless of
party affiliation are listed on one ballot. “I’ll explain this at birthday parties
if I have to,” she says.

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The race for the presidency and close Senate and congressional seats hog the
attention in election years. But Americans will also vote this November on
nearly 150 measures that can have a profound effect on state policy and
society. By September 27th, over $600m had been spent on such initiatives.
As with races near the top of the ballot, three things are dominating:
abortion, electoral reform and immigrants.

Only 26 states allow voters to decide directly on policies via citizen-led

initiatives or referendums. (“Initiatives” are placed on the ballot by citizens
with thousands of signatures in support of a petition. A “referendum” allows
voters to repeal or uphold a law.) Most of these states are clustered in the
West. They joined the union later, and many wrote their constitutions under
the influence of the Progressive movement at the beginning of the 20th
century. Reformers wanted to give voters power as a check on political
machines and special interests. In California, which has become a hotbed of
direct democracy (often to its detriment), ballot measures were a way for
reformers to counte the power of the Southern Pacific Railroad, which had
local politicians in its pocket. Every state but one, Delaware, requires its
legislature to put constitutional amendments on the ballot.

This year ten states will vote on measures that would protect access to
abortion. The success of similar measures in recent elections has begun to
spark a backlash against direct democracy. The Republican-dominated
legislature in North Dakota hopes to increase the number of signatures
needed to get an initiative on the ballot. In Arizona, lawmakers want to
require signatures to come from different parts of the state so that, for
example, reformers can’t get all of the support they need from Phoenix.
Alice Clapman, of the Brennan Centre for Justice, says it is common for
lawmakers to try to claw back power from voters. But she reckons this has
increased since the Supreme Court overturned Roe v Wade in 2022.

Seven states, including Nevada, are mulling open primaries, RCV or some
combination of the two. The moves stem from a desire to elevate consensus
candidates over fringe ones, and reduce mud-slinging. But research suggests
that the effect of RCV on partisanship and extremism is limited. Lee Drutman,
a political scientist who was once one of RCV’s biggest champions, has lost his
enthusiasm. “A lot of people are feeling really frustrated with how our
democracy is working,” he allows. “But if you’re trying to use [RCV] as a
solution to polarisation…you’re just going to set yourself up for
disappointment.”

Alaska will decide whether to repeal RCV; Missouri, whether to ban it pre-
emptively. Such measures could become more common in future years if
other state parties begin to feel that the reforms could threaten their power.

During the presidential debate Donald Trump said Democrats were trying to
get unauthorised immigrants to vote for Kamala Harris. He has made similar
fictitious claims since 2016. That paranoia has trickled down. Eight
measures would ban noncitizens from voting. It is already illegal for
unauthorised immigrants to vote in federal and state elections, and there is
no evidence that large numbers of them try to.

Several other measures deserve a mention. For the third time in a decade
Ohioans will try to end partisan gerrymandering. Californians will unfold
their lengthy ballot papers to see ten questions. Proposition 33, allowing
cities to expand rent control, is the most expensive in the country. Among
the most interesting is Prop 36, which would increase prison sentences for
some thefts and for drug crimes. Direct democracy may be under attack
elsewhere, but in California it is still king. ■

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United States | Washed away

Hurricane Helene was America’s deadliest storm

in nearly two decades
It wiped out North Carolina’s mountain towns
October 3rd 2024

When Hurricane HELENE hit Florida’s Big Bend on September 26th it was
hard to imagine that it would wreak the most devastation over 400 miles
north in the Appalachian mountains. Officials report that flooding across the
Southeast has killed about 200 people, more than any mainland tropical
storm since Hurricane Katrina in 2005. In North Carolina’s Buncombe
County alone, home to the city of Asheville, at least 35 residents have died
and 600 are missing. One woman who climbed to the roof of her house as
the waters rose watched her seven-year-old son get swept away. Mules are
delivering food to stranded survivors since roads were ravaged.
Warming temperatures, which let the air hold more moisture, made Helene
wetter than hurricanes past. Experts estimate that 40trn gallons of water fell
on the six-state region, enough to fill 60m Olympic-sized swimming pools.
Soil made soggy from days of rain before the hurricane probably helped
recharge the storm as it made its way inland. Some people in the razed North
Carolina towns are “climate expats” who moved from Florida to escape
extreme weather. Helene shows that even those far from rising seas are no
longer immune. ■

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deadliest-storm-in-nearly-two-decades
United States | Reinventing the army

The US Army’s chief of staff has ideas on the force

of the future
But can he scale up his clever experiments?
September 29th 2024

RANDY GEORGE joined the US Army in 1988. It had overhauled itself after
the trauma of Vietnam. It had written a new doctrine, known as AirLand
Battle, to defeat the Soviet Union in a war in Europe. And a few years later
it would smash the Iraqi army in the first Gulf war, a conflict in which
General George, as he is today, served as a young lieutenant. He is now in
charge of that same army, and wants to reinvent it, continuously, for a new
age.

General George took over as army chief of staff a year ago. His priority, he
tells The Economist, is building “lethal and cohesive” teams. Everything else
is secondary. The flab built up during the war on terror is being trimmed.
Brigades have turned in up to 700 excess vehicles, he says. The remaining
ones are being serviced less often, leaving more time and resources for
training. Army ammunition factories are working at full pelt. They produced
40,000 rounds of 155mm artillery shells in August, up by one-third from
February, and are “nearing” 50,000 per month. That is expected to double in
a year’s time. Manpower is improving, too. After years of missing its
recruitment targets, the army last month exceeded its goal for the year by
10,000 soldiers.

A much bigger task still lies ahead. The army has two big challenges. One is
where to look. America’s national defence strategy is explicit: China is the
priority. But any war over Taiwan would involve mainly air and naval
forces, and the army maintains a big presence in Europe. “AirLand Battle
was intellectually coherent because we had one enemy,” says John Nagl, a
professor at the US Army War College in Pennsylvania, “but a China-focused
army looks different from a Russia-focused army—plus the Middle East is a
mess.”

The other is technology. The war in Ukraine has shown that weapons may
work well for a while until the enemy adapts. America’s GPS-guided shells
have been blunted by Russian jamming. Drones’ software and sensors need
updating every six to 12 weeks to stay effective. “We’re fully aware of how
much the world has changed just over the last couple years, with commercial
tech,” says General George.

One scheme to tackle both challenges is what the army calls “transforming
in contact”. It has picked three brigades—the 2nd Brigade of the 101st
Airborne Division in Kentucky, the Pacific-focused 2nd Brigade of the 25th
Infantry Division in Alaska and the 3rd Brigade of the 10th Mountain
Division in Germany—to serve as laboratories for innovation. The trio
receive the newest kit and tech. They test it on exercises and give feedback
on what works.

In the past, says Alex Miller, the army’s chief technology officer, the army
would set “gold-plated” requirements—insisting that a drone be able to
survive in freezing and boiling conditions, say—and push this “over-
engineered” kit down to every unit over a glacial three to seven years. The
experimental brigades can instead quickly buy things that suit their
environment. Robots that work well in Louisiana, notes Mr Miller, might
struggle in the Pacific. “It’s a big difference to actually do this on the
ground, inside formations,” says General George. “We have users,
developers and testers that are all there together.”

The days of picking one company—usually one of a handful of arms

behemoths—and asking it to produce something for a decade or two are
gone, he says. The future is “modular” systems, such as platforms whose
sensors (cameras, radars or antennae) can be swapped out frequently, with a
greater reliance on consumer tech. A new infantry squad vehicle, a jeep-like
contraption, embodies this thinking. Built by General Motors, it is based on
the Chevrolet Colorado and 90% of its components are commercially
available.

Documents setting out what a new weapon or system has to do have

typically been long tomes, page after page of specifications that quickly go
out of date. A new one for the army’s next command-and-control system
amounts to a bureaucratic revolution: just five pages. General George recalls
an instance where the army was told it would take six to eight months to get
20 new coolant-pump covers for Bradley armoured vehicles. It was able to
3D print them all in less than an hour—at 16 cents each. That capability is
being pushed down to formations as small as brigades.

Despite all this, army insiders acknowledge that the present system is
broken, constrained by suffocating Pentagon rules and rigid legislation. Take
the example of first-person-view (FPV) drones, small, short-range attack
drones used in massive quantities by both Russia and Ukraine to good effect.
Why has the US Army been slow to produce these? Mr Miller notes that
American law prohibits the Pentagon from buying components made in
China. That has limited the supply of motors, speed controllers, antennae
and video transceivers. The army has turned to American and European
suppliers—the 82nd Airborne Division is cobbling together FPVs with legally
compliant parts—but production is puny. “We’re talking handfuls,” he says.

The scale of the task

But how to ramp up? The army has 59 brigade combat teams; experimenting
in a few of them only goes so far. Though the scheme will soon expand,
General George accepts that his “ultimate grading” will be whether he can
scale the new processes and kit across the whole army. Colonel David
Butler, his spokesman, points to the example of 1940 to suggest that a little
reform can go a long way. “We shouldn’t forget that Germany only
transformed one-third of their army,” he says, “enabling them to take over
most of Europe.” ■

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United States | Lexington

The vice-presidential debate was surprisingly

cordial
Its high-minded tone worked to J.D. Vance’s advantage
October 2nd 2024

Why did Tim Walz have to go and spoil things? For almost the entire vice-
presidential debate on October 1st Americans were transported back to a
different era in their politics, a time when candidates tried to seem—maybe
even were—respectful of each other, open to compromise, mindful of their
own weaknesses and intent on solving big problems. It was soothing, at
times even informative, a bit dull in a good way. No one bragged about the
size of their crowds, much less of their genitalia, or even called anyone else
by a demeaning nickname.

But then Mr Walz, the Democratic candidate, turned to his Republican

adversary, Senator J.D. Vance of Ohio, and asked a question about Donald
Trump: “Did he lose the 2020 election?” Somewhere in the distance—could
it have been in Springfield, Ohio?—a dog barked, and the illusion vanished.

“Tim,” Mr Vance replied, “I’m focused on the future.”

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our US election forecast model

As long as the illusion lasted, it probably supplied some solace to Americans

watching from home, and as a political matter it benefited Mr Vance.
Smiling and nodding pleasantly as the moderators formulated their
questions, he gave no hint of the trolling persona that has made him thus far
the most unpopular vice-presidential candidate in recent history; he made no
mention of cats, whether doted on by childless women or eaten by migrants.
Mr Vance exuded empathy for people trying to pay their grocery bills,
children fearful of guns in school and women seeking abortions.

The years of Mr Trump’s presidency have never seemed more lustrous than
when bathed in Mr Vance’s smooth flow of words. In his telling Mr Trump
became the keeper of global tranquillity, a leader wiser than all the experts
combined, somehow, even, the saviour of Barack Obama’s health-care plan.
(For his part, the real Donald Trump—the one who tried to kill Obamacare,
promising a plan he has yet to unveil—seemed intent during the debate on
reminding voters who he truly was, spewing posts on his social media
platform, Truth Social, attacking “Tampon Tim” and “Comrade Kamala
Harris”.)

A former teacher and football coach, Mr Walz, who is 60, served six terms
in Congress before running successfully twice for governor of Minnesota.
Despite his more extensive political experience, he turned in the less cogent
performance. Where Mr Vance reeled off complete paragraphs, Mr Walz
scattered sentence fragments and at times resorted to a shorthand that was
Trumpian in its bewildering simplicity (“The drug mule is not true”). He left
many of Mr Vance’s claims unchallenged. Maybe he had prepared for the
more belligerent Vance persona, rather than the adversary who warmly
shook his hand before the debate and went on to say things like, “I agree
with you. I think you want to solve this problem.” Mr Walz repeatedly
extended Mr Vance similar credit.
Mr Vance, just 40, has been in the Senate for less than two years, and this is
only his second campaign. In his brief time on the national stage he has
evolved from a harsh critic of Mr Trump and many of his policies to the
most articulate spokesman for the “New Right” movement, which seeks to
assemble a coherent, appealing ideology out of the odds and ends of
Trumpism. He was hard at that work during the debate, never more so than
on the subject of abortion.

Whereas Mr Trump likes to baldly state that “everybody” believed Roe v

Wade should be overturned, Mr Vance offered a more nuanced, if still
slippery, explanation of his position. Though Mr Vance once said he
“certainly would like abortion to be illegal nationally”, he insisted during the
debate that he had never supported a national abortion ban.

Mr Vance spoke of a woman he knew growing up who had an abortion

because she was in an abusive relationship. (“I know she’s watching tonight,
and I love you,” he said into the camera.) He said from such conversations
he had learned that “as a Republican who proudly wants to protect innocent
life in this country” he and other Republicans have “got to do so much better
of a job at earning the American people’s trust back on this issue where they
frankly just don’t trust us”. That meant, he said, being “pro-family in the
fullest sense”, by supporting fertility treatments and making it more
affordable to raise children. It also meant, he continued, letting different
states enact different policies regarding abortion. Amid the welter of words,
it was not clear what principle Mr Vance was advancing to win voters’ trust.
He did not explain why, if he believes a fetus has a right to life, he would be
comfortable with some states denying it, or why Americans who believe
women should have full reproductive rights should be any more satisfied
with a patchwork approach.

The only name-calling

Despite the sharp disagreements over matters like abortion, the debate was a
reminder of how much overlap exists between the parties’ agendas on
matters from industrial policy to child care to housing to a certain
indifference to budget deficits. Even on the politically fraught subject of
guns in schools, the two candidates found some common ground. “This is a
good start to the conversation,” Mr Walz said.

CBSNews, which hosted the debate, conducted a snap national poll afterwards
that found voters divided almost evenly over who won. A poll by CNN found
that each man was viewed more favourably after the debate than before it.
That might have something to do with the largely positive tone of their
exchange. The only name-calling of the night came from Mr Walz, and it
was directed at himself, as part of a clumsy attempt to explain why he
claimed he was in Hong Kong during the Tiananmen Square protests of
1989, when he was not. “I’ve tried to do the best I can, but I’ve not been
perfect,” he said. “I’m a knucklehead at times.” ■

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was-surprisingly-cordial
The Americas
Jair Bolsonaro still shapes Brazil’s political right
Peruvians are debating how to protect isolated tribes
Why is football in Latin America so complex?
The Americas | A long shadow

Jair Bolsonaro still shapes Brazil’s political right

Would-be successors are pandering to his fans
October 2nd 2024

ON OCTOBER 6TH voters across Brazil will go to the polls to select more
than 5,500 mayors and tens of thousands of city councillors (second-round
run-offs will follow at the end of the month). The gigantic municipal vote
provides a barometer of sorts for the next presidential election, which is due
in 2026. Signs in the run-up are unsettling. Two years after Brazilians booted
out Jair Bolsonaro, their inept and dangerous former president, right-wing
politics remains in his thrall. An acolyte—or perhaps an imitator—could
return Mr Bolsonaro’s movement to power.

For a while optimists had dared to hope that the bolsonaristas were a spent
force. After losing the presidential election in 2022 Mr Bolsonaro spent a
few months in Florida, moping around fried-chicken shops and occasionally
posing for selfies with fans. On January 8th 2023—one week after Luiz
Inácio Lula da Silva, the left-wing current president, was inaugurated—
supporters who believed their idol’s claim that the election had been rigged
ransacked Congress, the Supreme Court and the presidential palace.
Brazilians were appalled. And even some of the extremists, unimpressed by
Mr Bolsonaro’s wimpy self-exile, ended up feeling let down.

In June 2023 Mr Bolsonaro was barred from holding public office for eight
years for having used state television to cast doubt on the reliability of
voting machines in advance of the election that he lost. His problems have
only piled up since then. In March Brazilian federal police formally accused
him of forging a covid vaccine certificate. In July they formally accused him
of embezzlement in connection with gifts of jewellery and watches from
Saudi Arabia. (Mr Bolsonaro denies both these accusations.) Numerous
other probes are under way, including one examining to what extent Mr
Bolsonaro played a role in stoking the riots on January 8th. The chances of
his going to jail are rising.

Yet even if he is a much diminished figure, for the moment Mr Bolsonaro

remains a kingmaker for the political right. His Liberal Party is the largest in
Congress. This year he has proved able to attract tens of thousands—and
sometimes hundreds of thousands—of fans to events, such as rallies where
he criticises the Supreme Court, which is overseeing several of the
investigations into him (he is pictured above at one such gathering, in
September). For weeks he has been touring Brazil to drum up support for
mayoral candidates he endorses. In 23 of Brazil’s 100 or so largest cities,
candidates with backing from Mr Bolsonaro are polling in first place. (By
comparison, there are 16 races in which candidates supported by Lula, as the
current president is known, are likely to win.)

All this disappoints people who had wondered whether, with Mr Bolsonaro
barred from office, a more centrist opposition could emerge. Brazil’s main
centrist outfit, the Party of Brazilian Social Democracy, is weaker than ever.
In 2016 seven of Brazil’s 26 state capitals had mayors from that party; after
the elections this month the number may be zero.

Many technocratic conservatives are tacking to the right. Leading the

mayoral race in São Paulo, Brazil’s biggest city, are Ricardo Nunes, the
uncharismatic incumbent, and Guilherme Boulos, a socialist backed by Lula.
An endorsement from Mr Bolsanaro has helped Mr Nunes. But, in part to
win that support, he picked as his running-mate Mello Araújo, a
bolsonarista and former colonel who publishes pictures of his own children
carrying semi-automatic rifles, and who has also criticised the use of body
cameras by police.

The risk for politicians who choose to hold the middle ground is that they
will be shoved aside by upstarts from the radical right—even ones who have
not received Mr Bolsonaro’s formal blessing. The most eye-catching story in
São Paulo’s race has been the startling rise of Pablo Marçal, a 37-year-old
self-help guru and digital influencer who at present seems likely to win
around 20% of the city’s vote. His populist campaign apes much of what
made the former president a sensation, and appeals to many of the same
voters. During an election debate broadcast live on September 15th Mr
Marçal goaded a rival, who then hit him with a chair.

At a rally held by Mr Marçal on September 24th, cars bore flags carrying the
words “Out, Satan!” “Marçal has arrived to bring down the system,” chirped
a jingle blasting from one pickup truck. Regina Carvalho, a 63-year-old
small-business owner, could not name any of Mr Marçal’s election promises
(they include building a skyscraper 1km high). But she said she would vote
for him anyway. “Him saying ‘out with the corrupt, out with the system, out
with [leftist] activists’ is enough for me.”

The politicians who are most often tipped to lead the right into the election
in 2026 seem to be sensing the mood. Tarcísio de Freitas, the governor of
São Paulo state, Brazil’s richest and most populous, looks like one of the
best positioned. But despite having served as Mr Bolsonaro’s infrastructure
minister, he has long struggled to win bolsonaristas’ trust. He has worked in
left-wing governments, is considered friendly with Lula and is seen as too
nice to bankers.

Lately Mr Freitas has been trying to toughen up his image. He has permitted
the military police to intensify operations in his state’s poorer
neighbourhoods. In February a policeman was killed in a favela; in the
following 36 days police officers killed 45 people in the same district. Civil-
society organisations were outraged. “I couldn’t care less,” said Mr Freitas.
Bolsonaristas have “started seeing him as one of them”, says Camila Rocha
of the Brazilian Centre for Analysis and Planning, a research institute.

For the moment Lula remains relatively popular. He has hinted that he will
run for president again in 2026. Yet by then he will be nearly 81 (around the
same age that Joe Biden is now). Should plans change, his Workers’ Party
might perhaps struggle without him. Its base—made up of Roman Catholics,
manufacturing workers and the urban bourgeoisie—is shrinking. At the
same time, the stock of Brazilians who are likely to be attracted to right-
wing politics is growing. Mr Bolsonaro’s biggest supporters were
evangelical Christians, people in agribusiness who favour laxer
environmental laws and voters worried about corruption and crime.

In 2002, the year that Lula won a first stint as president, evangelicals made
up 15% of the population and Catholics 74%. Today 31% of Brazilians are
evangelicals and only half are Catholic. Agricultural exports were 37% of
Brazil’s total in 2000, but today make up almost half; in the same period
manufacturing has shrunk. The guise that Brazil’s right wing now assumes
could affect the country’s course for decades to come. ■

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brazils-political-right
The Americas | World’s end

Peruvians are debating how to protect isolated

tribes
Deaths in the Amazon are bringing matters to a head
October 3rd 2024

Jerson del Aguila was working for a logging company in the Peruvian
rainforest when he came across a family of naked tribespeople. It was the
first of two occasions in 2021 on which he would meet people from the
Mashco Piro, an isolated indigenous group. He and his co-workers turned
back and told a manager. But when his brother, Gean Marcos, was working
in the same timber concession a year later, things turned out differently.
Gean Marcos was shot with two arrows and killed.
That incident was one of at least eight bow-and-arrow attacks that have
taken place since 2010 in the same part of the Peruvian region of Madre de
Dios. Two have happened in the last three months, leaving two people dead
and another three missing. Calls are growing for Peru’s government to
expand a reserve that is supposed to be protecting the Mashco Piro (see
map), as well as people who might come into conflict with them. The case
encapsulates issues that also challenge Peru’s neighbours in the Amazon,
which is home to more such groups than anywhere else in the world.

The Mashco Piro are among more than 100 tribes that live mostly or entirely
apart from wider society, according to Survival International, an NGO. They are
often referred to as an “uncontacted” group, but the truth is more complex.
Anthropologists suspect they used to be less isolated, and that their ancestors
fled into the forest to escape violence that came with a rubber boom that
started in the 1890s. Some speculate that they are descendants of indigenous
slaves held captive by Carlos Scharff, a notorious rubber baron killed in
1909 during a slave rebellion.

Romel Ponceano, chief of the village of Monte Salvado, which lies near
their territory, is one of few outsiders to develop a rapport with members of
the tribe. Mr Ponceano (who is a member of the Yine people, another
indigenous group) says they have told him they have no interest in leaving
the forest. The first time he spoke to them, they asked him to strip naked to
show he was trustworthy. “Only bad people wear clothes,” they said.

Loggers have been working in their vicinity since a mahogany boom in the
1990s. These days the big money comes from felling shihuahuaco, a giant,
slow-growing tree used to make fancy floor panels. Much of the work is
legal. When the government created the Mashco Piro’s existing reserve, in
2002, it carved a large area of forest where the tribe was known to live into
timber concessions. Mr Del Aguila says that when he worked in the area he
would often come across footprints and abandoned camps (one of them
littered with turtle shells and animal carcasses). “It’s basically their land,” he
says.

Although contact can be dangerous for all involved, the stakes are highest
for the Mashco Piro themselves. Like other isolated people, they are
presumed to lack immunity to many quotidian illnesses. Carelessness of this
and other risks has caused tragedies in the past. In the 1940s and 1950s
Dominican missionaries made contact with another tribe in the region, the
Harakbut: they started by dropping bags of machetes, food and blankets out
of planes. Very many in that tribe subsequently died of disease. Eusebio
Ríos, who is Harakbut, says his father and grandfather ended up in a
Catholic mission, where a priest abused them and forced them to fell trees
and pan for gold. The tribe is “still trying to recuperate”, he says.

Authorities seem to recognise that the status quo in Madre de Dios will not
hold. In 2016 a Peruvian government commission recommended expanding
the existing reserve by some 350,000 hectares. But six presidential
administrations have failed to do it. Ricardo García, an official at the culture
ministry, says the current government supports expansion. “We’re taking up
the issue again.”

Money may be one hold-up. Expanding the reserve could mean modifying
14 logging concessions. In 2017 officials from Peru’s forest service, Serfor,
guessed that it would cost $88m to compensate timber companies.
Moreover, Peru’s forestry service tends to see formal timber companies as
allies in the fight against swifter and less well-controlled forms of
deforestation, says Claudia Ato, a former Serfor official.
It is possible that any new reserve might still not be big enough. The most
recent Mashco Piro attack took place outside the area proposed for
expansion. And lines on a map will not, on their own, keep people out.
Civil-society organisations say that between 2020 and 2022 14 Peruvian
environmentalists or indigenous leaders were killed defending land from
illegal gold-miners, loggers, drug-traffickers and the like. “It would be great
if the expansion meant the state puts more resources towards defending the
area,” says Ms Ato. “But that probably won’t happen.”

Mr Ponceano says the Mashco Piro sometimes approach remote indigenous

villages like his own to secure things such as machetes and pots. So far they
have always chosen to return to the forest afterwards. One day that might
change, he says. But if so, he hopes it will happen “because they want it to,
and not because of us.” ■

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protect-isolated-tribes
The Americas | Everyone’s a winner

Why is football in Latin America so complex?

Money-grubbing and regulatory capture explain its Byzantine leagues
October 3rd 2024

LATIN AMERICA is a football powerhouse. Its teams include Argentina

(the current men’s world champions) and Brazil (the most successful
national team in history). Yet if the region plays football with beauty and
elegance, its league systems are achingly complex. Latin American
competitions, now in full swing, can be more confusing than the offside rule.

For a fine example, look to Uruguay. In August cheers rang around your
correspondent’s street in Montevideo when Nacional, a local team, won the
country’s Intermedio (midseason) tournament. That competition sees
Uruguay’s 16 best teams split into two groups. The top performers from
each group compete in a final. This seems simple enough.
Yet every year these same 16 teams also compete against each other in an
Apertura (opening) league that takes place in the first months of the season,
and a separate Clausura (closing) league that does not start until the year is
nearing its end. An ultimate champion is decided in play-offs that include
the winners of the Apertura, the winners of the Clausura, and whichever
team has come top of an annual table (created, confusingly, by combining
the results from all three competitions). If any squad wins more than one of
those, a blizzard of fine print is consulted to work out what happens. “We
don’t even understand it ourselves,” laughs Juan Francisco Pittaluga, a
sports journalist.

Elaborate formats are common all across the region. Bolivia, Colombia,
Ecuador and Mexico have Apertura and Clausura systems of their own.
Mexico has play-offs for its play-offs. Working out which teams will be
relegated at the end of a season can require a calculator: in Colombia and
Uruguay, among other places, this is determined by an average of results
over several seasons. Why is it all so complex?

One explanation relates to player transfers. Some years ago Argentina

decided its football season should coincide with the European one, to make
it easier to sell players to European clubs. Yet that meant playing through
January, when temperatures can reach 40°C and many fans are away at the
beach. In 1991 Argentina pioneered the Apertura and Clausura system in
part to create a midsummer break.

Yet there is clearly more to it than that. Running several short tournaments
can allow for more matches in total (especially handy in Uruguay, a small
country which has fewer teams in its top flight than, say, England or Italy). It
is also supposed to create more matches that matter, boosting ticket sales and
income from television rights. Latin American football is both cash-strapped
by European standards and can be a route into politics (Mauricio Macri, a
former president of Argentina, came to prominence running Boca Juniors, a
big club). So bigwigs are forever creating new formats that might make
money—and perhaps also a name for themselves.

Byzantine rules about relegation result from regulatory capture. When

Grêmio, a famous club in Brazil, dropped down a division in 1991,
authorities all but ensured it would shoot back up by declaring that a
whopping 12 teams would be promoted the following season. European
teams can only dream of the security some of their Latin American peers
enjoy. In 2021 a dozen big European ones tried to start a league from which
none of them could be relegated. Fans gave that plan a red card.

Jeopardy and simplicity are popular in the stands. Brazil boasts the region’s
best league. Like many European ones, it has 20 teams, one sole table and—
since authorities blew the whistle on shenanigans—simple relegation rules.
For most casual fans, that is worth a cheer. ■

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so-complex
Asia
Japan’s new prime minister is his own party’s sternest critic
China is using an “anaconda strategy” to squeeze Taiwan
India has a unique opportunity to lead in AI
America is losing South-East Asia to China
Asia | The outsider otaku

Japan’s new prime minister is his own party’s

sternest critic
This could make it harder for Ishiba Shigeru to govern effectively
October 1st 2024

ISHIBA SHIGERU, Japan’s new prime minister, knows what his colleagues
think of him. “I have undoubtedly hurt many people’s feelings, caused
unpleasant experiences and made many suffer,” he said apologetically in his
final speech during the race for the leadership of the ruling Liberal
Democratic Party (LDP). Throughout his 38 years in parliament, Mr Ishiba has
been a gadfly. That outspokenness endeared him to voters, but made him an
outsider within the LDP. His first four leadership bids failed. Someone like him
could win only if the LDP faced a major “roadblock” and “divine will”
intervened, Mr Ishiba wrote in a book published this summer.
Divine will or not, Mr Ishiba triumphed on his fifth attempt last week, and
on October 1st he became Japan’s prime minister. His selection does not
herald a drastic change of trajectory in Japan’s foreign or economic policies.
But the gadfly may struggle to govern. That would leave Japan less capable
of meeting the myriad challenges it faces at home and abroad. Mr Ishiba’s
fate will depend largely on the LDP’s showing in snap elections for the lower
house on October 27th.

Mr Ishiba’s surprise win reflects the sense of crisis inside the LDP, which has
ruled Japan with only two brief interruptions since 1955. A recent scandal
over the misuse of political funds has dragged the party’s approval ratings
down. Though it is not yet in danger of losing power, many in the LDP worry
about losing swathes of seats. By choosing Mr Ishiba, the LDP opted for its
most popular figure, hoping that a change of leadership style will mollify an
angry public. His victory also illustrates the fear that many felt about
Takaichi Sanae, a hard-right nationalist whom Mr Ishiba edged out in a
second-round run-off.

Mr Ishiba defies easy categorisation “because he’s so heterodoxical on the

issues”, says Tobias Harris of Japan Foresight, a political-risk consultancy.
He entered politics after the death of his father, a long-serving LDP politician,
in 1981. His mentor was Tanaka Kakuei, a powerful LDP leader who
championed the country’s poorer parts. Hailing from Tottori, a sand-dune-
strewn prefecture on the northern coast of Japan’s main island, Mr Ishiba
inherited Tanaka’s commitment to overlooked regions, as well as his
emphasis on door-to-door campaigning. He calls himself a “conservative
liberal”.

The new prime minister has also used his personal obsessions to help build
his popular appeal. Like many of his compatriots, he is a train aficionado
and loves ramen (he made headlines for eating 12 bowls in a day). He once
appeared in public in the costume of Majin Buu, a character from Dragon
Ball, a popular manga series.

The character he has played throughout his own career has been consistent.
“He’s the party’s critic,” says Gerald Curtis of Columbia University. In the
early 1990s he left the LDP, helping bring about its first electoral loss and
earning himself a reputation as a traitor. After returning, he emerged as the
most outspoken detractor of Abe Shinzo, Japan’s longest-serving leader,
whom he accused of stifling debate. He believes a politician’s job is to
“speak the truth with courage and sincerity”.

His own policy positions are hard to pin down, however. A former minister
of regional revitalisation and of agriculture, Mr Ishiba frames his economic
agenda around a vague desire to elevate Japan’s greying, depopulating
countryside. On social issues, he has shown a liberal streak. He supports
letting married couples keep separate surnames—a proxy for broader battles
over sexism and family life.

A self-proclaimed defence otaku (obsessive), Mr Ishiba is a former defence

minister and an avid collector of model planes and warships. He has long
bristled at subordination to America, arguing for Japan to take on a bigger
security role and create a more equal alliance. Although Mr Ishiba favours
strengthening Japan’s armed forces to counter China, he also places great
importance on maintaining dialogue. He is clear-eyed about Japan’s history
of imperial aggression, and supports better relations with South Korea, its
former colony.

Yet he has also advocated some provocative ideas that worry officials in
Washington, as well as his own bureaucrats. Most notably, he has called for
creating an “Asian NATO”, to link America’s various bilateral alliances in the
region into a collective one. He has also suggested revising the agreement
that governs how American military forces operate in Japan. The issue is a
“classic Pandora’s box”, says Michael Green, a former American official.

As prime minister Mr Ishiba will face an uncomfortable choice. He can

continue to pursue the provocative approach that won him public favour, but
risk losing the support of fellow party members. Or he can bow to the
realities of governing, but risk losing the public.

Some initial steps suggest that he will aim for pragmatism. Kishida Fumio,
the outgoing prime minister, backed Mr Ishiba over the hard-right Ms
Takaichi, in part to ensure that his diplomatic legacy remains intact. “We
will inherit the entire foreign and security policy from the Kishida
administration,” says Nagashima Akihisa, a veteran lawmaker appointed as
a national-security aide to Mr Ishiba. Yet the prime minister still has his
preoccupations: during his first press conference he defended his ideas about
the alliance with America.

Either way, Mr Ishiba may have a tough time hanging on. The LDP’s right
wing has been hostile to him: Ms Takaichi rejected the olive branch of a
senior party post under the new leader. He has few loyal allies inside the
party. He will have to navigate the upcoming lower-house elections, build
ties with a new American president, and then face upper-house elections
next summer. Many in Japan’s political circles already suspect that another
LDP leadership struggle will soon follow. ■

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partys-sternest-critic
Asia | An interview with Admiral Hua Tang

China is using an “anaconda strategy” to squeeze

Taiwan
Taiwan’s navy commander warns that his forces are increasingly strained
October 3rd 2024

China’s dislike of Taiwan’s president Lai Ching-te is no secret. Chinese

authorities call him a stubborn, confrontational “separatist” who may
provoke war in the Taiwan Strait. But since Mr Lai’s election in May, it is
China’s People’s Liberation Army (PLA) that has been raising the chances of
conflict by deploying more air and naval craft around Taiwan. “The PLA is
using an ‘anaconda strategy’ to squeeze the island,” says Admiral Tang Hua,
Taiwan’s navy commander.

In an interview with The Economist, Admiral Tang (pictured) warns that

Chinese forces are “slowly, but surely” increasing their presence around his
country. “They are ready to blockade Taiwan at any time they want,” he
says. His concerns are backed up by the data. The number of PLA air
incursions across the median line, the de facto border in the middle of the
Taiwan Strait, has jumped more than five-fold, from 36 in January to 193 in
August. The number of PLA ships operating around Taiwan has steadily risen,
too, doubling from 142 in January to 282 in August. These vessels are also
coming closer to Taiwan—right along its contiguous zone, or 24 nautical
miles from its coast. And they are patrolling for a few days at a time, up
from a few hours previously, according to Taiwan’s naval commander.

These are relatively new developments. Until August 2022 the PLA had
operated mostly in Taiwan’s south and west, around the Bashi Channel
between the island and the Philippines. Taiwan’s rugged east coast, home to
aircraft hangars built underneath its mountains, was seen as safer and harder
to reach from China. But that changed after a visit to the island that year by
Nancy Pelosi, then a high-ranking American official. The trip enraged China
and, soon after, the PLA conducted a mock blockade near Taiwan’s east. That
sent a signal that the region was no longer safe. Now the PLA has normalised
patrols there and regularly encircles the island by sea and air. It has also
increased the number of navy transits through the Yonaguni channel between
Taiwan and Japan.

Few people in Taiwan are aware of how close and regular the PLA patrols are.
Since 2020 Taiwan’s defence ministry has published daily updates on air
activity around the island, including maps of Chinese warplanes’ locations.
In 2022 it added updates on the number of PLA naval vessels operating
“around Taiwan”. But it does not specify what types of ships, where they go,
or for how long. The government may be worried that too much disclosure
would damage Taiwan’s public morale or economy, says Admiral Tang.

The PLA’s increased patrols are straining Taiwan’s navy. China has twice as
many frigates and ten times as many destroyers. Taiwan often has to deploy
25-50% of its combat vessels just to match China’s patrols, according to
Cheng-kun Ma and Tristan Tan, a pair of Taiwanese defence researchers.
“They give you extreme pressure, pressure, pressure. They’re trying to
exhaust you,” says Admiral Tang. A government audit found that more than
half of Taiwan’s main warships had fallen behind on regular maintenance.
As the PLA Navy presses closer to the island, Taiwan is focused on avoiding
confrontation. “The PLA is trying to force Taiwan to make mistakes,” says
Admiral Tang, and looking for “excuses” to trigger a blockade. That is why
Taiwan’s military leaders issued new rules of engagement this year that
define ethical and legal use of force in self-defence: “We restrain our guys,
not to provoke or escalate.”

Even as Taiwan’s armed forces practise restraint its leaders are working with
allies on how to keep sea lines of communication open in case of a blockade.
Taiwan is also seeking international help to resist Chinese pressure. Japan’s
navy conducted a transit exercise through the Taiwan Strait for the first time
in September, as did naval ships from Australia, New Zealand and Germany.
America’s navy sails through it several times a year. The exercises send a
signal to China that the strait is international territory. The Chinese
authorities protest. But they show no sign of loosening the anaconda’s
squeeze. ■

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squeeze-taiwan
Asia | Putting the AI in Mumbai

India has a unique opportunity to lead in AI

Its development will be unlike China’s or America’s
October 3rd 2024

HINDI IS THE world’s most widely spoken language after English and
Mandarin. Yet it constitutes only 0.1% of all freely accessible content on the
internet. That is one obstacle to India developing its own generative
artificial-intelligence (AI) models, which rely on vast amounts of training
data. Another is that Hindi is spoken by less than half the country. More than
60 other languages have at least 100,000 speakers. Data for some of them
simply do not exist online, says Manish Gupta, who leads DeepMind,
Google’s AI arm, in India. Natives of those languages stand to miss out on the
AI revolution.

Generative AI tools such as ChatGPT, a chatbot, are powered by large language

models, or LLMs. The “language” bit is crucial: without a corpus of data it is
impossible to make models, whether large or tiny. That is one reason why,
two years into the new AI race triggered by the launch of ChatGPT, India has yet
to produce any noteworthy AI innovations. But behind the scenes the
government, non-profit outfits, Indian startups and global tech giants are
working to adapt the technology to the country’s needs. The pace and scale
of their success will influence India’s progress in the coming century. It will
also offer lessons for other developing countries.

There are two big reasons for India to develop its own AI capabilities. First, as
a rising power it is wary of depending on foreign technology. Second, it
could be transformative for development. “The real value comes from how
you apply these technologies to make a difference to people,” says Nandan
Nilekani, a tech grandee.

For a better sense of India’s AI challenges—and opportunities—consider the

analogy of cooking dinner. The raw ingredients for AI are data. In the absence
of a well-stocked pantry India is doing the equivalent of growing its own
food. AI4Bharat, a research lab at the Indian Institute of Technology in
Chennai, has sent people across the country to manually collect voice
recordings in 22 languages. Google is doing something similar. Both feed
into Bhashini, a government project to create a translation system for Indian
languages.
Next, the data are blended, simmered and seasoned using a recipe known as
a model. Models can be huge, with lots of ingredients and many complicated
steps, or they can be relatively straightforward. The recipes behind ChatGPT or
Google’s Gemini are enormous. But for India’s purposes, simpler ones may
suffice. One idea is to use open-source models, such as Meta’s Llama, as a
base sauce, and then add ingredients or tweak the techniques according to
local needs. Sarvam AI, a startup in Bangalore, is going down this route.

Lastly, cooking requires the skilful harnessing of power. Just as turning

ingredients into food depends on the application of heat, so AI relies on
specialised computer chips. The sort needed to build and run sophisticated AI
models are expensive and in short supply globally. Earlier this year the
government said it would acquire 10,000 of them at a cost of 50bn rupees
($600m) to make computation power available at subsidised prices. And
Indian innovators are exploring other types of chips that may be better suited
to their purposes.

What, then, will all this effort produce? As in the West, the most visible
products will at first be chatbots. The difference is that these will be tailored
to immediate, practical uses, revolving around translation and simplifying
dealings between citizens and the state. Moreover, Indians use the internet
largely as an audiovisual, rather than textual medium. So Indian AI products,
unlike Western ones, will be voice-first or exclusively voice-based.

Take form-filling, which can seem like India’s national pastime. Allowing
citizens to verbally answer questions in their own language, which a
machine inputs into forms, would widen access and remove middlemen.
Automating checklists for compendious compliance rules or bots that assist
in interpreting requirements could make the process less soul-crushing. “For
the first time with UPI [a home-grown digital-payments system] we can say
something in India is better than the rest of the world. But the truth is that
every other damn thing is not better,” says Vivek Raghavan, a co-founder of
Sarvam. AI, he reckons, “has the ability to flatten that, if everything became
easier to do”.

AIcould also help in areas such as education and health. One study in 2022
found that less than half of Indian students in year five could read at the
level of year two. The health-care system, too, is in dire shape. Cheap, mass-
scale personalised tutors could start tackling the crisis in learning. Systems
that help in interpreting lab results, assist in diagnoses, or take on
administrative work could free up doctors to see more patients. The sclerotic
justice system could be sped up by automating some of the procedural tasks
that take up as much as half of judges’ time.

Many of these challenges exist across the developing world. With a few
notable exceptions, non-European languages are poorly represented online.
India’s advantage will come not from pushing at the boundaries of AI, but
from solving chronic, basic problems of the sort rich countries no longer
think about. India has a unique perspective that could enable it “to build out
the next set of AI-led companies in many more categories than exist,” says
Dev Khare of Lightspeed Venture Partners.

All this echoes the country’s approach to “digital public infrastructure”, its
name for technology platforms backed by the government and built upon by
private companies. India has invested in identity systems, digital payments,
data management and open protocols, all built at a low cost. The success of
these efforts at home has prompted the government to promote their use
abroad as a means of winning goodwill and projecting power. If Indian
techies can find ways to train and run AI systems frugally, that expertise, too,
will be attractive to other developing countries.

India’s AI success is by no means guaranteed. Some are sceptical of the

government’s 10,000-chip plan: the state has a poor record of using its
research-and-development resources effectively, and the idea that
bureaucrats would decide which projects are worthy is unappealing to many.
The use of small models to solve big problems remains untested. And even
if India lines up the ingredients, recipes and power it needs, it still faces a
severe shortfall of chefs. According to the Takshashila Institution, a think-
tank in Bangalore, 8% of the world’s top AI researchers are from India. The
proportion of them that actually work in India rounds to zero. ■

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in-ai
Asia | No longer showing up

America is losing South-East Asia to China

President Joe Biden will not attend this year’s East Asia Summit
October 3rd 2024

Eight years ago Barack Obama spent several days in the twilight of his
presidency in Laos. He bought a coconut from a roadside stall, visited holy
sites, then sat through two days of stultifying summitry. But when Asian
leaders once again convene in Laos on October 11th, President Joe Biden
will not be there. He is skipping the East Asia Summit, an annual meeting of
18 countries, for the second year in a row. Antony Blinken (pictured), his
secretary of state, will represent America instead.

A big part of Mr Obama’s “pivot to Asia” was a promise to join the East
Asia Summit every year. Chaired and hosted by a rotating cast of South-East
Asian leaders, the summit gives the region’s politicians an opportunity to set
the agenda and tell the American president what they think of his policies. It
sent a signal that America would listen to small countries, and drew a
contrast with China, which has a habit of hectoring its neighbours at the
meeting. The year that America joined the East Asia Summit, Hillary
Clinton, Mr Obama’s secretary of state, joked that “half of diplomacy is
showing up.”

America’s disengagement from Asia’s top multilateral institution is partly

the result of conflicts in Europe and the Middle East that have diverted its
attention. But it is also deliberate. The Biden administration has mostly
stopped trying to persuade the region of its position on China in talking-
shops like the East Asia Summit. Instead it is focused on working with
countries that already share its perspective, such as Australia, India and
Japan, which along with America make up the Quad, a security grouping.
Mr Biden hosted their leaders at his home last month.

But South-East Asia remains at the geographic and economic heart of the
competition between America and China, so ignoring it carries risks. For the
first time this year an annual survey of politicians, civil servants and
business leaders by the ISEAS-Yusof Ishak Institute, a think-tank in Singapore,
found that if forced to align with either America or China, South-East Asian
elites would choose China.

Besides diplomacy, there are three reasons for this. First, American
protectionism and industrial policy are alienating South-East Asia. America
offers no new access to its market in free-trade agreements. Tariffs are
upending established trade patterns. “Derisking” measures are driving up
costs as supply chains split into two.

Second, South-East Asians have begun to question whether American policy

on Taiwan is driving up the risk of conflict. America has always struck a
careful balance on the self-governing island. It works to deter Chinese plans
to retake it by leaving open the possibility of an American military response,
while discouraging Taiwanese leaders from moving towards independence
and thus provoking China.

But South-East Asians fear that America might be departing from this line.
A visit to Taiwan in 2022 by Nancy Pelosi, the former speaker of the House,
raised tensions in ways that South-East Asian states found dangerous. Mike
Pompeo, who was secretary of state under Donald Trump, has said that
America should support Taiwanese independence. If Mr Trump returns to
government, Asian officials will worry more.

Third, America’s backing of Israel in its conflict with Hamas has cost it
support among Muslims and young people in the region. Many see a double
standard between America’s condemnation of China’s persecution of
Uyghurs and its support for Israel’s bombing campaign in Gaza. So
unpopular has Mr Biden become among Malaysians that its leader, Anwar
Ibrahim, is said to be relieved that the American president is skipping the
summit in Laos. ■
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china
China
Worries of a Soviet-style collapse keep Xi Jinping up at night
A missile test by China marks its growing nuclear ambitions
Why China is awash in unwanted milk
China | The fear of falling

Worries of a Soviet-style collapse keep Xi Jinping

up at night
China’s Communists have now been in power longer than the Soviets
September 30th 2024

IN LATE SEPTEMBER workers erected a new structure in Tiananmen

Square. It is 18 metres tall, resembling a basket of fruit and flowers. Similar
floral-themed displays have sprung up across Beijing in celebration of the
75th anniversary on October 1st of the founding of Communist China. This
one bulges with giant peaches and gourds—symbols of long life. But
China’s leader, Xi Jinping, worries about how long-lived his party’s rule will
be.

Amid the festivities, state media have avoided mention of another milestone
that this year’s National Day represents. At the time of the Soviet Union’s
collapse in 1991, Communists had been in power for 74 years in Moscow.
The Chinese Communist Party has now surpassed “big brother”, as it once
called the Soviet Union. When that empire disintegrated, the bloody
suppression of the Tiananmen Square protests in 1989 was a recent memory.
With ruthless resolve China’s party crushed opposition and kept itself safe
from the shock waves emanating from Moscow.

Now in his speeches Mr Xi frets about how officials’ vigilance has been
weakened by years of prosperity, raising the dangers of Soviet-style decay.
Even after a dozen years in power, during which he has carried out purges of
potential rivals from the party’s senior ranks and waged relentless
ideological campaigns to ensure the absolute loyalty of its nearly 100m
members, Mr Xi appears far from satisfied.

The past few years have been tough. First came the chaotic abandonment in
2022 of Mr Xi’s “zero-covid” policy. Since then there has been an anaemic
economic recovery which has prompted a desperate attempt to revive growth
with attention-grabbing stimulus measures. Amid the gloom, reminders of
the Soviet collapse have kept coming up in speeches, the media and party
meetings. The purpose has not been to suggest that the country’s immediate
difficulties might topple the party, but to caution officials to be on their
guard against long-term, persistent dangers.

At the end of 2021, around the 30th anniversary of the Soviet collapse, party
officials began convening internal meetings to air a five-part documentary
about it. The series railed against “historical nihilism”, party-speak for
criticism of the horrors of Stalinism and Maoism. It accused the Soviet
leader, Nikita Khrushchev, of setting the trend with his “secret speech” of
1956 denouncing Stalin’s personality cult. This “ignited the fire of nihilism”,
intoned the narrator. From then on, the documentary implied, the Soviet
party was living on borrowed time. The viewings continued for weeks at
government offices, state-owned firms and on campuses.

In October 2022, at a five-yearly party congress, Mr Xi hinted at the anxiety

that the Soviet collapse still causes among China’s elite. “We must always
stay alert,” he told the gathering, “and determined to tackle the special
challenges that a large party like ours faces so as to maintain the people’s
support and consolidate our position as the long-term governing party.”
The phrase “special challenges of a large party” has since become a leitmotif
of party propaganda, much of it referring to the experience of the Soviet
party, the only other big one that China truly cares about. Since the party
congress, numerous books have been published with those words on the
cover, including at least three this year. Academics have churned out papers
on the topic. In July state television broadcast a two-part documentary on
avoiding collapse, with part one on the special-challenges theme. Officials
again organised viewings for party members.

Mr Xi has also kept on using the special-challenges term. It was the subject
of a classified speech he gave in January 2023 to the party’s Central
Committee. Part of it was published in March this year. “As the party grows
larger, some may form small cliques or factions or engage in behaviour that
undermines party unity and fighting strength,” he said. “A fortress is most
easily breached from within. The only ones who can defeat us are
ourselves.” Most analysts agree that there are no obvious splits in the party
today, but their possible re-emergence clearly worries him.

In August Mr Xi mentioned Soviet history again. The occasion was the

120th anniversary of the birth of Deng Xiaoping, the leader who launched
China’s “reform and opening” policy in the late 1970s. He praised Deng for
“resolutely opposing the turmoil” in China in 1989 “against the background
of the disintegration of the Soviet Union and dramatic changes in Eastern
Europe”. He quoted Deng as saying: “No one can crush us.”

In the vast body of literature that China has produced since the 1990s on the
Soviet collapse, a shift in emphasis has occurred under Mr Xi. Deng’s
supporters used the Soviet Union’s fate as a way of pushing back against
ideologues in the party who saw his economic reforms as a betrayal of
Marxism. Similar dogmatism, they argued, had wrecked the Soviet
economy, fuelling public discontent that hastened the country’s fall. In
essence, this was the message of Deng’s “southern tour” of early 1992 that
relaunched his reform programme.

Mr Xi appears more fixated on the Soviet party’s loss of ideological and

organisational discipline. This is evident in the huge effort he has made to
rebuild the party at the grassroots, to beef up its presence in private firms
and to enforce total obedience to his commands among party members.
After the Soviet collapse Deng and his immediate successors abandoned talk
of political reform but still tolerated limited experiments, such as allowing
small NGOs to help victims of injustices. Mr Xi, in contrast, has crushed civil
society. Chinese academics make clear why, arguing that Western-backed
NGOs played a role in pushing the Soviet party over the edge.

China’s propagandists prefer not to dwell on a problem that is common to

autocracies: how to ensure a smooth transfer of power when a leader steps
down or dies. In 2010, two years before Mr Xi took over, a book published
in China—“The Truth About the Soviet Union: 101 Important Questions”—
included analysis of its succession strife. During Communist rule in
Moscow, it said, the choice of leaders was determined by “brutal internal
power struggles, decided by a handful of elders behind the scenes or even
resolved through party coups”.

Mr Xi appears not to have drawn the lessons. He has shown no interest in

grooming a successor and has changed unwritten rules to allow himself to
lead for as long as he likes. The eventual transition to a post-Xi China may
again evoke memories of the Soviet Union’s turbulent history. ■

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xi-jinping-up-at-night
China | Making a sPLAsh

A missile test by China marks its growing nuclear

ambitions
America worries that it is looking to surpass its own capabilities one day
September 27th 2024

THE LAST time China fired an intercontinental ballistic missile (ICBM) out
over the Pacific, Xi Jinping was 27 years old, China’s GDP per head was less
than $200 and America had just lifted an arms embargo on the country. So
the missile that rose from Hainan island on September 25th—carrying a
dummy warhead and plunging into the waters around French Polynesia,
some 12,000km to the east—was a mark of China’s soaring nuclear
ambitions.

The test comes at a time of heightened tensions in the region. On the same
day as the launch, a Japanese warship sailed through the Taiwan Strait for
the first time—a move that irked China, which claims both Taiwan and the
strait. The two events are unlikely to be related, with the missile test
probably planned well in advance. The warship was on its way to military
exercises in the South China Sea, where Malaysia, Vietnam and the
Philippines (an American treaty ally) are challenging China’s territorial
claims. With its aggressive behaviour, China is “testing us all across the
region”, President Joe Biden told the leaders of Australia, India and Japan on
September 21st, in what he thought were private remarks.

Mr Biden’s intelligence analysts are busy studying the nature and timing of
China’s missile test. It probably involved the DF-31AG, a nuclear-capable ICBM
that is carried and fired from large lorries that can go off-road—the better to
hide from American satellites. (If fired from China’s new silos, it could
strike anywhere in the continental United States.) For the past 44 years every
Chinese ICBM test has been conducted inland, usually in the Gobi desert. But
the range for such tests is less than 3,000km. In order for China to test the
missiles at their full range, without them flying over other countries, it must
fire them into the Pacific. Such tests ensure that the warhead’s re-entry
vehicle works as it should.

China may also have hoped to re-establish the credibility of the Rocket
Force of the People’s Liberation Army (PLA). Five current or former
commanders of the force were removed from their political roles in
December amid reports that corruption had resulted in missiles loaded with
water instead of fuel. But more embarrassing news came a day after the
missile test when the Wall Street Journal reported that China’s most
advanced nuclear attack submarine sank in May while sitting at a pier in the
city of Wuhan. The sub, which was not yet in service, is likely to be
salvaged and repaired. The cause is unknown.

Sunken vessels aside, American intelligence analysts are worried. In a report

published last year, the Pentagon said that China was implementing a
“launch on warning” policy, meaning it would fire its own nuclear missiles
at the first sign of a nuclear strike—not after incoming nukes had landed, as
would be the case under China’s declared policy of “no first use”. During the
recent test, China may have hoped to assess how a missile crew would fare
using a mobile launcher in an unfamiliar coastal location, says Decker
Eveleth of CNA, an American think-tank. Working under such conditions
might be expected in a “launch on warning” scenario.
The Pentagon report also said that China had 500 “operational” nuclear
warheads (though many of these are thought to be at storage locations some
distance from missiles). That is around twice the number it was thought to
have had three years earlier. American officials estimate that China will have
1,000 warheads by 2030 and 1,500 by 2035. America has around 1,770
deployed warheads, and several thousand in reserve. “I see a lot of
intelligence, but I’ve never seen anything that says they intend to stop at
parity,” said Lieutenant General Andrew Gebara, the US Air Force’s deputy
chief of staff for strategic deterrence, in September, referring to the
deployed-warhead numbers. “Why would they?”

Nuclear doves retort that these assessments are overheated and uncertain. At
present, America far outmatches China in overall warhead numbers. China,
meanwhile, faces constraints on getting the fissile material needed to build
new warheads. “It is far from certain that the future pace of China’s arsenal
growth will be constant,” says Fiona Cunningham of the University of
Pennsylvania.

America’s defence department tends to see things differently. It admits to

having underestimated the pace of China’s advances. When crafting
America’s nuclear modernisation programme over a decade ago, the growth
and diversification of China’s arsenal were “something we neither
anticipated nor accounted for”, said Vipin Narang, then the department’s top
nuclear official, in August. But in this new nuclear age, he said, China’s
progress would be the “defining feature”. ■

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growing-nuclear-ambitions
China | Udder pressure

Why China is awash in unwanted milk

Dairy farmers are dumping the stuff, as some call for culling cows
October 3rd 2024

Milk is “indispensable for a healthy China and a strong nation”. So said

officials in 2018 when they launched a campaign to supercharge the
country’s dairy industry. They wanted to boost China’s food security by
cutting its reliance on imported milk. At the same time, they hoped that the
Chinese would become fitter by consuming more dairy products, which are
rich in protein and calcium. Officials gave farmers subsidies to increase their
herds of cows. They urged state propagandists to “nurture the habit of
consuming dairy products”.

The campaign has achieved some of its goals. Since it began, China’s milk
production has risen by a third. Last year the country’s cows yielded 42m
tonnes of the stuff, surpassing a government target two years early. But the
public has not fallen in love with milk. The average Chinese person still
consumes only about 40kg of dairy products a year. That is a third of the
global average and less than 40% of what China’s health authorities
recommend.

Because production has outpaced consumption, China’s dairy farms are

awash in unwanted milk. As a result, they have been forced to lower their
prices by 28% since August 2021 (see chart). At the end of September, one
kilogram of raw milk sold for 3.14 yuan (45 cents) on average. That is below
the cost of production for many farms. Most have been losing money since
the second half of last year, reckons Lu Shi of StoneX Group, a financial-
services firm.

Why aren’t Chinese people consuming more dairy products? For a start,
many are genetically predisposed to be intolerant of lactose, a sugar found in
milk. Outside areas like the Mongolian steppe, where nomads have long
herded cattle, dairy products are not a big part of traditional Chinese diets. In
the 19th century some Chinese were shocked by the love of milk displayed
by visiting Westerners. “In many places our practice of drinking it and using
it in cooking is regarded with the utmost disgust,” wrote an American
missionary at the time.
These days Chinese parents are much more likely to tell their children to
drink milk. Dairy companies sponsor the country’s Olympic athletes. But
dairy products have not become staples. Chinese consumption is largely
limited to milk and yogurt. Butter and cheese, which account for lots of milk
production in other countries, are unfamiliar in many parts of China. Most
people still “don’t understand the culture of cheese or how to appreciate it”,
grumbles Liu Yang, a cheesemonger in Beijing.

Chinese people are even less likely to buy exotic foodstuffs at the moment
because of the ailing economy and its effect on incomes. Meanwhile, a baby
bust has reduced demand for infant formula (made from cow’s milk).

When Chinese firms produce too much stuff for the domestic market, they
often export it. But selling Chinese dairy products overseas is tough.
Because China has to import much of its cattle feed, the cost of production is
high by international standards. Chinese dairy products have a poor
reputation, too. Memories linger of a scandal in 2008 when Chinese
companies were found to be adding melamine, a dangerous chemical, to
their milk powder. Six babies died and hundreds of thousands fell ill.

All this leaves Chinese dairy farmers in a bind. Some are reportedly
dumping milk. The state is trying to help by encouraging banks to extend
more loans to farmers and to accept cattle as collateral. Officials have also
called for raising public awareness of the health benefits of dairy products.
But Li Shengli of the China Dairy Association thinks the problem is too
many cows. In comments published by state media last month, he called for
culling 300,000 of them. ■

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Middle East & Africa
A dangerous dispute in the Horn of Africa
Middle East & Africa | Looking for trouble

A dangerous dispute in the Horn of Africa

Ethiopia and Somalia are courting escalation in a quarrel over port access
October 3rd 2024

Few parts of the world are more turbulent than the Horn of Africa, the
continent’s north-eastern chunk that contains Somalia, Djibouti, Ethiopia
and Eritrea. It has been racked by war between Ethiopia and Eritrea, by civil
war in Ethiopia, and by war and state collapse due to a prolonged jihadist
insurgency in Somalia. Outside powers, particularly those from across the
water in the Gulf, vie for the Horn’s loyalties and resources.

In recent months the situation has grown even more alarming than usual. A
tense stand-off over port access has pitted Ethiopia against Somalia and
Eritrea, and is drawing in regional powers, including Egypt, Turkey and the
United Arab Emirates (UAE). With no sign of an early resolution, the dispute
threatens further strife across the Horn by fuelling regional rivalries within
Somalia and strengthening al-Shabab, the jihadist group terrorising much of
the country and its neighbours.

The port dispute began in January, when Ethiopia signed a memorandum of

understanding with Somaliland, a self-declared breakaway republic that is
not recognised by the UN or any other country. Under the agreement Ethiopia,
which lost its direct access to the sea in 1993, when Eritrea seceded, would
lease a stretch of coast from Somaliland on which to build a naval base. In
return, it would be the first country to recognise Somaliland since it declared
independence more than three decades ago.

Somalia, which regards Somaliland as part of its own territory, was furious.
Hassan Sheikh Mohamud, Somalia’s president, lays the main blame on Abiy
Ahmed, Ethiopia’s prime minister. “Abiy is the bad guy in the region,” Mr
Mohamud told The Economist on September 30th in Mogadishu, Somalia’s
capital. “Today everyone is worrying about the unpredictable behaviour of
the Ethiopian leadership.”

Initially, much of the region was inclined to agree with him. Following the
memorandum, both the African Union (AU) and the Intergovernmental
Authority on Development, the east African regional bloc, put out
statements in support of Somalia’s “territorial integrity”. So did America and
the EU. Turkey, Somalia’s sturdiest foreign investor, promised to send troops to
help defend Somalia’s maritime borders. Mr Mohamud “managed to put
Abiy on the defensive”, notes a veteran AU diplomat. Ethiopian officials
began wavering over their commitment to recognise Somaliland, suggesting
that Abiy had agreed to consider the matter only after the terms of the naval
base had been settled.

This political victory for Somalia might have provided a way to avoid
confrontation. Yet observers have recently been alarmed by Mr Mohamud’s
own escalatory manoeuvres. In June he threatened to expel thousands of
Ethiopian peacekeepers stationed in Somalia as part of an AU mission to fight
al-Shabab, an al-Qaeda affiliate that controls swathes of the countryside
outside Mogadishu. Then in August he visited Egypt to sign a military co-
operation agreement with President Abdel-Fattah al-Sisi. Egypt pledged to
send Somalia weapons and possibly, though Mr Mohamud would not
confirm this, several thousand troops in a new AU peacekeeping mission
which is due to begin next year. Two Egyptian arms shipments have since
arrived in Mogadishu.

Playing with fire

Many foreign diplomats and analysts see the security pact as a dangerous
escalation, given the hostile relations between Ethiopia and Egypt. Those
two countries have been locked in a bitter dispute ever since Ethiopia began
building its Grand Ethiopian Renaissance Dam, a giant hydroelectric project
on the Blue Nile near its border with Sudan in 2011. Egypt, which relies on
the Nile for almost all its water supply, views the dam as an existential threat
and once threatened to bomb it. Last December it said talks to reach a
compromise were “dead”.

Ethiopia also worries about Somalia’s increasingly cosy relationship with

Eritrea. One motive for Abiy’s deal with Somaliland was the collapse of a
previous understanding with Eritrea that Ethiopia might gain access to the
Red Sea via its northern neighbour’s ports. Understood to be part of the
peace deal between the two countries in 2018, for which Abiy was awarded
the Nobel peace prize, the agreement appeared to disintegrate in the wake of
Ethiopia’s civil war in 2022. The deal between Ethiopia and the Tigrayan
People’s Liberation Front (TPLF) that ended their civil war angered Eritrea,
which was also fighting against the TPLF.

Amid those disputes, Ethiopia’s deal with Somaliland has prodded Mr

Mohamud to find common cause with Issaias Afewerki, Eritrea’s dictator
since independence in 1993. This year Issaias has twice hosted the Somali
president in Asmara, Eritrea’s capital. Like Egypt, Eritrea might send troops
to take part in the AU’s next peacekeeping mission in Somalia. Eritrea and
Egypt are reportedly also discussing a military co-operation and
intelligence-sharing agreement. If such talks result in a formal tripartite
alliance, Ethiopia would be further isolated.

It would also entrench the division of the Horn into two geopolitical blocs.
Egypt, Eritrea and Somalia are most closely aligned with Saudi Arabia and
Turkey. They all back the regular Sudanese army in that country’s civil war.
On the other side are Ethiopia, Somaliland (plus some of Somalia’s regional
statelets) and the Rapid Support Forces, the paramilitary group battling the
Sudanese army. They are under the tutelage of the UAE, which seeks to expand
its influence around the Red Sea.

So far, Abiy has been characteristically defiant. On September 8th he

proclaimed, rather ominously, that Ethiopians “usually embarrass and repel
those who dare try to invade us”. Ethiopia’s army chief lambasted Egypt
directly, describing it as a “historic enemy”.

Mr Mohamud, by contrast, accuses Ethiopia of waging a campaign of

sabotage against Somalia. He claims that Ethiopia is funnelling arms to clan-
based Somali militias near the two countries’ shared border in an effort to
destabilise the government in Mogadishu. He says these weapons could fall
into the hands of al-Shabab, boosting the jihadists. Ethiopia is also
mobilising clan leaders and opposition politicians in Somalia against the
potential deployment of Egyptian troops, he says. Whipping out his phone to
show your correspondent photographs of river floods in Somalia, he claims
they were caused by Ethiopia deliberately releasing water from reservoirs at
dams upstream.

Some of these allegations are probably overblown. Omar Mahmood of the

International Crisis Group (ICG), a think-tank in Brussels, notes that the trade
in illegal arms across the Ethiopian border long predates the MOU between
Ethiopia and Somaliland. Likewise, the government’s fight against al-
Shabab, which made some progress in the months after Mr Mohamud took
office, had already started to lose momentum last year, as Somalia’s ill-
trained national army struggled to hold onto towns it had won back.

Still, it is plausible that Ethiopia might give succour to Somali regional

leaders who are opposed to Mr Mohamud—if it has not done so already.
Several of Somalia’s statelets, in particular South West, close to the capital,
are at odds with the president over his agreement with Egypt. Some might
happily strengthen relations with Ethiopia as a hedge against his
government, which they find overbearing.

Such conflict could further undermine Somalia’s control of its own territory,
hardly solid at the best of times. Mr Mohamud suggests that, if pushed, he
could stir up disaffected ethnic Somalis living in Ethiopia. “It would be very
easy [...] to scratch their grievances,” he says.

The risk of direct war between either Ethiopia and Somalia or between
Ethiopia and Egypt remains low. Somalia’s army is too weak to confront
Ethiopia head-on. Abiy is too busy fighting insurgents in Ethiopia’s Amhara
region to take on Egypt. More worrying is the prospect of a fresh conflict
between Ethiopia and Eritrea. If a boxed-in Abiy should attack Eritrea to
take control of its Red Sea ports, “the chance of war on that front cannot be
ruled out,” says an Ethiopian analyst.

But even without all-out war, the dispute over the ports could easily worsen
stability throughout the region. Talks between Ethiopia and Somalia,
mediated first by Kenya and more recently by Turkey, have made little
progress. A new round that was originally planned to be held in September
has been postponed indefinitely. “A naval base on Somalia’s territorial
waters is a red line we can never accept,” insists Mr Mohamud.

Mind the jihadists

Abiy, for his part, has a record of dragging out negotiations while
establishing “facts on the ground”. He also appears to have the UAE’s support.
In private, Emirati officials have told their Western counterparts they have
no interest in seeing an Ethiopian naval base, and would prefer Ethiopia to
use an Emirati-owned port in Somaliland’s coastal town of Berbera. But
many observers (including, judging by heavy hints to The Economist, Mr
Mohamud himself) reckon Ethiopia already has at least tacit support from
the UAE. Few in the region expect Abiy to back down. “Maritime access is his
calling,” says another Ethiopian analyst.

Time is short. The new, slimmed-down peacekeeping force to keep fighting

al-Shabab in Somalia is supposed to be ready by January 1st. Mr Mohamud
says that if the MOU between Ethiopia and Somaliland is not scrapped by then,
Ethiopian peacekeepers must leave. America, in particular, does not want
untested and diplomatically contentious Egyptian or Eritrean forces to
replace them.

That risks jeopardising the mission altogether. “There is a serious risk of a

physical security vacuum opening on the ground which al-Shabab can fill,”
warns the ICG’s Mr Mahmood. Even more reason for all the sides to get
talking. ■

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the-horn-of-africa
Europe
Pedro Sánchez clings to office at a cost to Spain’s democracy
Why the hard-right Herbert Kickl is unlikely to be Austria’s next
chancellor
Ukraine’s Roma have suffered worse than most in the war
The Netherlands’ new hard-right government is a mess
A harrowing rape trial in France has revived debate about consent
How the wolf went from folktale villain to culture-war scapegoat
Europe | Not wholly in power

Pedro Sánchez clings to office at a cost to Spain’s

democracy
His opponents accuse him of subverting the constitution
October 3rd 2024

“We will move forward determinedly…with or without the help of the

legislature,” Pedro Sánchez, Spain’s prime minister, told a meeting of his
Socialist Party earlier last month. To his more excitable critics, this sounded
like a declaration of dictatorship. In fact, it was a recognition of his
embattled circumstances. In office since 2018, Mr Sánchez is the great
survivor of European politics, a wily and ruthless tactician. But his minority
coalition government rules at the pleasure of Catalan and Basque radical
nationalists, and at a growing cost to the quality of Spain’s democracy and
its institutions.
After the left took a drubbing in local elections, Mr Sánchez called a snap
national poll in July 2023. The mainstream conservative People’s Party (PP)
won, but even with the support of Vox, a hard-right outfit, fell six short of a
majority of the 350 seats in parliament. Rejecting the broad coalition with
the PP that many voters preferred, Mr Sánchez instead decided to carry on by
stitching together the backing of eight assorted parties.

One of those was Junts, the party of Carles Puigdemont, a former Catalan
regional president who has been a fugitive from justice since an illegal bid to
break away from Spain in 2017. His price was an amnesty for all those
involved in the independence bid. Mr Sánchez had always opposed this. But
he complied, ramming it through parliament by five votes.

Now he is poised to offer another concession to Catalan nationalism. In

return for securing the installation of Salvador Illa, a Socialist, as the
regional president in Barcelona, Mr Sánchez promised Esquerra, another
separatist party, what amounts to fiscal sovereignty for Catalonia, one of
Spain’s richest regions. As with the amnesty, this is a “constitutional reform
through the back door”, as a sceptical former Socialist minister puts it. Since
it means less money for the common pot, it has aroused more grumbling
than the amnesty.
The amnesty is the only important measure the government has got through
parliament in its ten months in office. It failed to win approval for this year’s
budget and is unlikely to do so for next year. To make matters worse,
Begoña Gómez, the prime minister’s wife, is being investigated by a judge.
She denies wrongdoing, and Mr Sánchez claims she is a victim of political
persecution. But many question how she obtained university posts for which
she is not obviously qualified. In a seemingly ill-advised step, she signed a
letter of support for a friend bidding for a government contract. When this
scandal broke, rather than apologise, Mr Sánchez blamed the “far right” and
said he was considering whether political life was worth it. He subjected
Spaniards to a five day “period of reflection”, only to resume work.

None of this means he is in imminent danger. Unseating a Spanish prime

minister requires assembling a parliamentary majority for an alternative, a
harder challenge than just winning a no-confidence vote in parliament, as is
the case in many other countries. Alberto Núñez Feijóo, the PP’s leader,
recently told El Mundo, a newspaper, that a censure motion was “as essential
as it is impossible”. Although some senior Socialists privately express
disquiet with the concessions to separatists, only a couple do so in public.
Mr Sánchez has an iron grip on his party which resembles a fan club, says
one member.

The prime minister can point to achievements. Since 2018 he has boosted
the minimum wage and cut the abuse of temporary contracts without hurting
employment, which is growing fast. He has expanded vocational training.
After suffering worse than its neighbours in the pandemic, the economy has
grown at more than double the euro-zone average since 2023. Some of the
growth comes from a post-pandemic boom in tourism, which shows signs of
faltering, and some from the EU’s covid-recovery fund, which runs out in
2026, and from an expansionary fiscal policy that cannot last. But Spain has
strengths that point to resilience, as Ignacio de la Torre of Arcano, an asset
manager, notes: it has a relatively high savings rate and a healthy current
account surplus, boosted by growing exports of services, such as data
management and engineering consultancy.

Mr Sánchez’s biggest asset is an ineffective and divided opposition. Mr

Feijóo, formerly a successful regional president in Galicia, has struggled on
the national stage. Although Vox is slowly declining, the PP’s potential
dependence on its parliamentary votes means that other parties shun it. A
new nativist outfit, propagated by social media and called The Party’s Over
grabbed 4.6% of the vote in June’s election for the European Parliament.

Many in Madrid think Mr Sánchez can last out a full term until 2027. But
the lack of a budget may narrow his options. If the right remains split three
ways and with the economy strong, he may be tempted to call an election
next summer, thinks Cristina Monge, a political scientist.

His dependence on Catalan and Basque nationalists carries a cost. “Sánchez

has broken an unwritten rule that you couldn’t become prime minister with
the votes of parties that don’t believe in the stability and governability of the
country,” says Borja Sémper, the PP’s spokesman. Mr Sánchez’s abrupt U-
turns on matters of state purely in order to remain in office have contributed
to entrenched public cynicism about Spanish democracy.

He claims to have ended separatist agitation in Catalonia. Certainly, his

pardoning in 2021 of nationalist leaders jailed for the breakaway bid was
sensible. But he has gone further than many observers think wise. He has
weakened the penal code: in documents signed with Junts and Esquerra, his
party endorsed the nationalist narrative of recent history. The sweeping
nature of the amnesty (which applies to rioters as well as politicians) and its
narrow approval without much public debate flew in the face of the
recommendations of the Venice Commission, a European consultative body
on the rule of law. It still faces various legal challenges.

Mr Sánchez has also placed political appointees in supposedly independent

jobs, such as in the Constitutional Tribunal and the Bank of Spain. He has
instructed the state lawyer to sue the judge investigating his wife.
“Traditionally Spain has suffered from some weaknesses in checks and
balances,” says Elisa de la Nuez, a campaigner for the rule of law. “In recent
years that has got much worse.”

The prime minister did not invent the political fragmentation that makes the
country so hard to govern. He could argue that he is adapting the political
system to changed realities, especially in Catalonia. Others see a shift
towards an ill-defined confederation, and tactical tinkering while the country
drifts. ■
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Europe | Austria’s election

Why the hard-right Herbert Kickl is unlikely to be

Austria’s next chancellor
In spite of his strong win
September 29th 2024

USUALLY, COMING top in a general election would make you a popular

person in your capital. But Vienna was different this week. Despite Herbert
Kickl’s win by a solid margin, with 29% of the votes on September 29th, no
other political party wants to run the country with him and his hard-right
Freedom Party (FPÖ). The governing centre-right People’s Party (ÖVP) came
second with 26%, and is trying to avoid exactly that.
Coalition talks will take weeks, if not months, but their likeliest outcome is a
coalition of the ÖVP with the Social Democrats (SPÖ), who got 20% of the vote,
and the liberal NEOS, with 9%. The two would together have just enough to
form a “grand coalition”, because around 6% of the votes went to parties
such as the Beer Party and the Communist Party that did not reach the
threshold of 4% needed to enter parliament (see chart). Yet a majority of just
one vote in parliament is likely to be deemed too fragile by both Karl
Nehammer, the ÖVP’s incumbent chancellor, and Andreas Babler, the leader of
the SPÖ.

“The ÖVP decides the next government,” says Kathrin Stainer-Hämmerle of the
Technical College in Kärnten. Other than forming a three-way coalition, it
could indeed form a government with the FPÖ. But Mr Nehammer has vowed
not to join any government with Mr Kickl in it (he has left open the option
of forming a government with the FPÖ but without its leader). Moreover,
Alexander van der Bellen, the Austrian president, strongly prefers a three-
way coalition without the FPÖ, as do the employers’ association and the unions.
After the election Mr van der Bellen emphasised that the next Austrian
government must protect human rights, support Austria’s membership of the
European Union and respect the media’s independence. Critics of the FPÖ say
the party falls short on all three counts.
Unlike in neighbouring Germany, where the chancellor is elected by
parliament, Austria’s president names the country’s chancellor. Although the
president is not constitutionally obliged to nominate the leader of the party
that got the most votes, that is usually the case. Mr van der Bellen, who hails
from the Green Party, has a visceral dislike of Mr Kickl and has said in the
past that he might indeed not nominate him if he won.

Mr Kickl has declared that his role model is Viktor Orban, the Hungarian
leader who has turned his country into a quasi-autocracy since coming to
power in 2010. Mr Kickl is likewise anti-immigration, anti-Islam and
strongly Eurosceptic, and refuses to condemn Russia’s invasion of Ukraine.
His electoral programme, “Fortress Austria”, calls for ending political
asylum entirely, which would breach EU rules.

But the People’s Party and the Social Democrats are also uneasy bedfellows.
The former moved to the right under Sebastian Kurz, Mr Nehammer’s
predecessor, while the latter has moved to the left under Mr Babler, whom
Mr Kickl has called “a lazy, unpalatable Marxist”. (Mr Kickl has also called
Mr van der Bellen “a little bit senile” and his political opponents a
“swingers’ club”). On economic policy, for example, the ÖVP is closer to the FPÖ
than to the SPÖ. Some parts of the SPÖ’S programme, such as the introduction of a
32-hour work week or an inheritance tax, are unacceptable to the ÖVP. If the SPÖ
drops these demands, the ÖVP will need to agree to other SPÖ policies, such as
reform of the education system.

Expect weeks of tortuous talks. Vorarlberg is holding a state election on

October 13th and Styria votes on November 24th. The FPÖ might come first in
both, which will further bolster its power in state parliaments. The party is
already also part of the state governments of Upper Austria, Lower Austria
and Salzburg.

A draft coalition agreement is expected by early December, followed by

fine-tuning over the holidays. Mr van der Bellen will probably name the new
chancellor at the start of the year. Mr Nehammer will run the country until
then, and probably for longer at the head of a three-party coalition. But if
that three-way team performs as poorly as the one in next-door Germany, it
will play into Mr Kickl’s hands. Although the wiry Carinthian is unlikely to
be the next chancellor, that does not mean he will never get his dream job. ■

Correction (September 29th): This article originally misidentified the FPÖ

politician who called for Mr Nehammer’s resignation.

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Europe | Hoping for better

Ukraine’s Roma have suffered worse than most in

the war
Half of them may have fled
October 3rd 2024

The war in Ukraine has shattered its Roma community. At least half of its
pre-war population has fled abroad. That is a vastly higher proportion of
refugees than among Ukrainians at large. Eleonora Kulchar, the director of a
Roma refugee shelter in Uzhhorod in the country’s west, says that many
have gone “for a new and better life, because they were discriminated
against here and poor”. Few expect them ever to return. Many of them lack
passports or identity cards, so may never be able to, because they cannot
prove they are Ukrainian citizens.

On an unpaved street in Uzhhorod’s Radvanka district children laugh and

play, a rare sight in Ukraine, where it is unusual for couples to have more
than one child. But Ukraine’s Roma still tend to have large families. Some
of the children are barefoot. Houses in the Roma area are ramshackle. Many
are not connected to mains electricity and gas. Several are empty, their
windows broken, their owners long gone.

Myroslav Horvat, a Roma member of Uzhhorod’s local council and a

community leader, says that before Russia’s full-scale invasion in February
2022 there were about 3,000 Roma in the area. Today he estimates there are
only about 1,500, including refugees from elsewhere in Ukraine.

No reliable data exist on Roma numbers. Unofficial estimates before the

invasion varied from 200,000 to 400,000. Activists and academics reckon
that at least half have since fled. Roma have always lived all over the
country, but the province of Transcarpathia, of which Uzhhorod is the
capital, has traditionally been home to a large community.

Ms Kulchar’s shelter is hosting 64 people, many of whom sleep crammed in

a room that used to be a restaurant. She opened it five days after the Russian
attack, when Roma refugees arriving in Uzhhorod were turned away from
shelters opened for the rest of the population. Since then, she says, some
3,000 have passed through her doors. Most have since left the country.

A horse trots by, drawing a cart carrying the skeleton of a washing-machine.

Roma scavenge through Uzhhorod’s rubbish bins, taking food and anything
that can be recycled. Roma are discriminated against elsewhere and find it
hard to get jobs, but Uzhhorod’s municipal rubbish company has long been
an exception. Yet now, says Mr Horvat, many Roma don’t want to work for
it because they fear military press-gangs which, he said, had even “taken
people from the garbage trucks”.

Many Roma have fought and died to defend Ukraine. A recent report by the
Roma Foundation for Europe, a lobby backed by the EU and George Soros’s
Open Society Foundations, found that a quarter of families surveyed had
family members serving. The war has upturned the lives of millions but
Roma, overwhelmingly poor and ill-educated, have been among the hardest
hit. Many lack proper documents to deal with officialdom and get access to
welfare. The report found that a third of the respondents said their family’s
finances were in crisis.
Dima, who sells bric-a-brac in Uzhhorod’s flea market, says he has seven
children, so he should have had a dispensation from the army which exempts
men from service who have three or more children. However, when the war
began, he and his wife were not married, and he could not prove that their
children were his. The army has now agreed that he should be exempt, but
its database has not been updated, so if he were to be picked up, he could be
sent off to war.

In the first weeks of the conflict Ukrainian border guards let Roma men flee
when other men could not. Now the army is desperate for more men and will
grab the likes of Dima, who says: “They don’t care how many children you
have!”

Mykola Palinchak, who teaches at Uzhhorod university, says low levels of

education mean that many Roma have in the past been in thrall to
community “barons” to whom they would turn for help to get official papers
and to find work. This opened the door to exploitation, he says. In recent
years, though, the power of the “barons” has been declining thanks to the
spread of American-backed evangelical churches which have brought aid to
people whom Ukraine’s mainstream churches have mostly ignored.

In 2021 the Ukrainian government adopted a plan to help its Roma people
combat discrimination. But in the wake of the war it is unlikely to have
enough money to spend on it. Meanwhile, anti-Roma attitudes and
prejudices die hard. Ukrainian parents still warn their children that if they
are naughty “they will be given to the Gypsies in Uzhhorod.” ■

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most-in-the-war
Europe | In the Wildersness

The Netherlands’ new hard-right government is a

mess
Conflicts over asylum, farms and the constitution could bring it down
October 3rd 2024

THE MS GALAXY 1 once ferried passengers between Finland and Sweden.

Since 2022, the massive ship has been moored in Amsterdam, where the city
leases it as accommodation for 1,500 asylum applicants, 500 of them already
approved. The boat is not bad, says Haymar Nyein, a Myanmar opposition
activist who came on a UN study tour of The Hague and requested asylum in
July after images of her protesting in Yangon made it risky to go back.

She may be on the ship for a while. For years the Dutch government has
declined to build enough asylum centres, forcing municipalities to find
housing. A painstakingly negotiated deal was supposed to start spreading
applicants around the country next year. But the hard-right government that
came to power in June plans to scrap that deal. On September 13th it
announced a governing programme promising “the toughest asylum policy
ever”.

Dick Schoof, the new prime minister, faces a series of baffling policy
conundrums. He is a non-partisan former civil servant picked as a
compromise: the anti-Muslim Party for Freedom (PVV) came first in the
election, but two centre-right coalition partners, the Liberals and New Social
Contract (NSC), ruled out the PVV’s leader, Geert Wilders, as prime minister. The
PVV got the immigration ministry, and has demanded a complete halt to

asylum procedures. That would violate immigration law, so it wants to

declare an asylum emergency and set the law aside for now.

That proposal caused a firestorm in parliament on September 19th. The

government claimed that civil servants had approved its legality, but when
the opposition forced it to hand over the assessments, most were withering.
The constitution allows states of emergency only for urgent crises such as a
dyke break, says Lisanne Groen, a law professor at Amsterdam’s Free
University; asylum could be handled under normal legislation. The NSC, a
year-old party that detests government overreach, will not back an
unconstitutional plan. But Mr Wilders suggests that in that case he might
bring down the government.

Another set of problems involves agriculture. In 2019 a court ruled that

Dutch farmers’ nitrogen emissions (chiefly from the country’s vast numbers
of livestock) violated EU nature-protection laws. Plans by previous
governments to solve this with buy-outs were fiercely opposed by many
farmers. Their political champion, the Farmer Citizen Movement (BBB), is the
new coalition’s smallest partner. The BBB agriculture minister, a former
contestant on the reality-television show “Farmer Seeks Wife”, has ditched
the old plans, but she has yet to come up with any new ones.

Then there is manure. A derogation granted by the EU in 2006 lets Dutch

farmers spread more of it on their fields than normally allowed; but it
expires in 2025. The cost of shipping cow, pig and chicken dung to disposal
sites would put many farmers out of business. The agriculture minister is
lobbying the European Commission for an extension. Should that fail,
“we’re heading for an implosion of the sector,” says Harm Holman, an NSC MP.
There is little reason to think that the EU will grant exceptions. The
Netherlands faces no migration crisis: its asylum numbers are about average
for the EU. The coalition’s plans on housing and climate are mostly skimpy or
counterproductive. Many Dutch wonder whether it will make it to
Christmas. But Mr Wilders’s PVV is at 27% in the polls, higher than at the
election. He might not mind another one. ■

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Europe | Sexual violence

A harrowing rape trial in France has revived

debate about consent
Anything less than yes is no
October 3rd 2024

For five weeks a harrowing rape trial taking place in a courtroom in the
southern town of Avignon has shaken France. Dominique Pelicot, a retired
71-year-old, stands accused of drugging his then wife, Gisèle, raping her,
inviting dozens of other men recruited online to rape her too while she was
unconscious, and of filming them, all over a period of nine years. The trial,
due to run until December, has opened French eyes to the horror of chemical
submission and to what appears to be a disturbing misunderstanding of what
constitutes rape, as well as to the remarkable courage and dignity of a
woman who decided to make her ordeal public. French law on rape may
now be changed as a result.
Mr Pelicot has pleaded guilty, telling the court “I am a rapist” and asking his
former wife for forgiveness. Some of his 50 co-defendants, aged between 26
and 74, with varied backgrounds and professions, seem less clear. According
to a count by Le Monde, a newspaper, 35 of the accused have contested the
charges, arguing that they were not aware that they were committing rape.
“Did you ask yourself whether she had agreed?” asked the presiding judge
of one of the accused. “I never asked myself that question,” he replied.

Mrs Pelicot’s courage in deciding to waive her right to anonymity has been
widely applauded. Each day she enters the court house, supporters clap.
Gifts and messages of support have been sent from around the world.
“Shame has to switch sides,” her lawyer’s words as the trial began, is now a
campaign slogan. Only 6% of victims of rape, attempted rape or sexual
assault in France file a police report, according to a survey by the interior
ministry in 2022.

The case has put the crucial #MeToo question of consent at the centre of
debate. French law defines rape as any sexual act committed “by violence,
coercion, threat or surprise”. It includes no explicit reference to the need to
obtain consent. On September 27th Didier Migaud, the new justice minister,
said that he is open to writing consent into French law.

Consent-based rape law already exists in Germany, Britain and other

European countries. After Sweden introduced it in 2018, accompanied by a
campaign to stress that “Sex is always voluntary; if not, it’s a crime,”
reported cases of rape surged, as did convictions. After a stomach-churning
French trial, reform of the law would be a vindication. ■

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Europe | Charlemagne

How the wolf went from folktale villain to culture-

war scapegoat
The startling return of wolves in Europe raises hackles
October 3rd 2024

For centuries an ancestral fear has haunted the bedtime stories and the
ensuing dreams of Europe’s children: the wolf. A devourer of youngsters
wandering in folktale forests, the stealthy carnivore once loomed large in the
public imagination. Modernity put paid to the dread peddled by the Brothers
Grimm. By the early 20th century wolves had all but disappeared from
Europe, driven to extinction by poaching and loss of habitat. But in recent
decades a remarkable resurgence has been lauded by green campaigners as a
form of ecological atonement: the first step to reversing centuries of man-
made environmental carnage. Rural types, more likely to hear lupine howls
in the dead of night and to find mutilated livestock and pets come morning,
are less enthused. The wolf is now dividing Europeans, rather than eating
them, as they argue over whether humans should once again share their
cramped peninsula with a rival predator.

Humans still rule the European roost. But the return of the wolf has been
startling. From a few isolated packs at the start of this century, there are now
an estimated 20,000 wolves at large, from Spain to Poland. The number has
roughly doubled in the past decade alone; wolf packs can now be found
prowling and howling in every country in mainland Europe. Unlike
America, which deliberately reintroduced wolves to some regions, the
increase has been natural. In large part that is down to strict wildlife
protections enacted in the late 1970s at European level. But wolves benefited
from the retreat of humans in other ways. When borders fell—notably the
iron curtain that once divided Europe—wolves migrated from east to west.
The shift of population from the countryside to cities left more forests for
wolves and their prey. As humans left, in other words, wolves took their
place.

For environmentalists the lupine return is welcome not just because it marks
the return of a native species. As “apex predators”, wolves play a cascading
role in fostering biodiversity. Their presence helps regulate the population of
the deer and boars they naturally feed on. This culls the weakest members of
their prey, checking disease that might one day affect humans. By keeping
such grazers on the move, wolves also give a chance to trees and plants that
would otherwise get devoured, resulting in a more varied landscape.
Leftovers of their feasts provide food for scavengers. With wolves around,
ecological systems once regulated by man—for example by issuing more
hunting permits if deer populations get out of hand—are now the purview of
nature instead.

The trouble is, wolves are unfussy about their diet, and are as likely to eat
farm animals or pets if that is what is at paw. They attack an estimated
65,000 sheep, goats, cows and horses every year. Though that is a tiny
fraction of the continent’s livestock—well below 0.1% in the case of sheep
—it has produced lots of local angst. Farmers are already convinced they
live in polities misruled by urban types with little clue about what happens
beyond the suburbs (they also have a knack for protesting and plenty of
manure on hand to make their point). That the issue is dealt with at
European Union level scarcely reassures them: being forced by some distant
Eurocrat to cohabit with wolves is to add insult to neglect. City slickers who
will happily vote for culls of pigeons lest one poop on their cargo-bike now
cheer the reintroduction of wolves that terrorise rural folk and prey on their
livelihoods.

The rural-urban culture war has, predictably, been fanned by politicians on

the hard right. Alternative for Germany, a party that usually focuses its
outrage on migrants, has demanded “rapid action” to control wolves. What
was once a fringe debate in EU circles became a cause célèbre in September
2022 when a wolf was found to have killed Dolly, the 30-year-old prized
family pony of Ursula von der Leyen, president of the European
Commission, at her home near Hanover. In what has turned out to be the
unwisest PR move since preying on Little Red Riding Hood, wolves soon
came into the political cross-hairs. Mrs von der Leyen is said to have a
picture of Dolly in her office, and pushed the cause of wolf-culling up the
political agenda.

She now seems likely to get her way. On September 25th a majority of the
EU’s 27 national governments agreed with the commission that the protection

accorded to wolves should be downgraded, from “strictly protected” to

merely “protected”. It is not quite open season on wolves: further haggling
will now be needed to formally revise the relevant wildlife-conservation act.
But campaigners are delighted by this rare victory for the countryside.
Hunters, who resent wolves chasing the same game as them, have lauded the
prospect of new “coexistence tools” with wolves—a polite way of saying
they look forward to shooting lots more of them.

Not by the hair on my chinny-chin-chin

Ecologists decry a decision they say reflects bad politics and worse science.
In much of Europe wolf populations are fragile—and would crash without
the protection that is now being partly withdrawn. The threat posed by
wolves is overdone: there is no evidence of one seriously harming a human
since they made their comeback. Yes, the prowlers kill the odd farm animal,
but guard dogs and fencing do a reasonably good job of keeping them out
(and are subsidised, on top of compensation for mauled herds).
Ultimately the battle is one over the role not just of wolves, but of humans.
Rural people identify with ancestral efforts to tame the land, to transform the
frontier into settled pastures fit for unmolested human occupation. Giving a
once-defeated foe a chance to reassert itself is inexplicable, they think, like
inviting a convicted burglar back into your house. Why volunteer for that?
Yet there may be sense in the seeming madness: it is something about
keeping us humans on our toes, a reminder that we are part of the
environment we live in, not its undisputed master. ■

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Britain
Britain’s Conservatives adopt the bad habits of the Labour left
Why on earth would anyone go to a British party conference?
Ukrainians are settling down in Britain. That creates a problem
Gigafactories and dashed dreams: the parable of Blyth
The scourge of stolen bikes in Britain
Britain’s last coal-fired power station closes
How British-Nigerians quietly made their way to the top
Britain | Tory Benn

Britain’s Conservatives adopt the bad habits of the

Labour left
The cult of the member grips the opposition
October 2nd 2024

TONY BENN died in 2014 as a socialist hero to the left. But he is

remembered by his opponents within the Labour Party for a singularly bad
idea: the cause of “party democracy”. Labour, Benn reckoned, was “riddled
with the same aristocratic ideas as deface our national democracy”. From the
1970s on, he battled to make its MPs beholden to the wishes of its card-
carrying members. To his critics, that inverted the party, placing the whims
of its activists above those of the wider electorate it was bound to serve.

The Conservative Party appears to be in the grip of a similar disorder. Four

candidates—Kemi Badenoch, James Cleverly, Robert Jenrick and Tom
Tugendhat—paraded their wares at its annual party conference in
Birmingham this week. This quartet will soon be reduced by MPs to two, with
the winner to be selected in November by the Tory membership. The
influence of that party selectorate helps explain why the Tories are now
afflicted by the habits that characterised the old Labour left—a veneration of
the membership and deep ideological stubbornness. Call it Tory Bennism.

The conference thus echoed with the grovelling of Conservative MPs, not to
the British people for 14 years of patchy governance, but to the membership
for its worst defeat (in seats and vote share) since 1832. “I am profoundly
sorry to you, the members of the Conservative Party,” said Richard Fuller,
the chairman, opening proceedings on September 29th. “It wasn’t this party
that failed, it wasn’t the ideas that failed, it was the centre that failed. They
all let you down,” echoed Mr Tugendhat. A sorrowful Mr Jenrick vowed he
would “return the party to the service of the membership”.

At Mr Fuller’s instigation, members debated with shadow ministers from the

conference floor, restoring a tradition abolished in 1999. “At last the party is
putting free speech into action!” trilled Sir Jacob Rees-Mogg, a former
minister. The candidates lined up to take potshots at the much-resented
spotty graduates who run Conservative Campaign Headquarters (CCHQ). Local
associations, all candidates promised, would be able to pick their own
candidates for Parliament and end what Mr Jenrick called “parachuting in of
the favoured sons and daughters of the leader, the special advisers, the press
officers from Number 10”.

Mr Tugendhat said that the chairman of the National Convention, a

gathering of voluntary party bigwigs, should attend the shadow cabinet “so
we can hear from him directly what members think”. Ms Badenoch said that
members should see the minutes of the party’s board. Such minutiae once
obsessed only the Labour left.

The scenes in Birmingham were a partial replay of the response to the

party’s previous defeat in 1997, says Tim Bale, a historian of the party, when
party high-ups sought to assuage grassroots members who were angry at
defeat and irritated by CCHQ. William Hague, the then leader, responded by
granting Tory members a vote on the leadership, a choice that had
previously been the preserve of MPs. Lord Hague now regrets this, since it did
not create the mass membership he had hoped to encourage.
Instead the ranks of the Tory faithful have become thinner—the data are
opaque but membership was 172,000 at the last leadership vote in 2022—
and more radical. For Bennites, the right to kick out Labour MPs was essential
as a way of forcing them to obey conference resolutions. Some on the Tory
fringes have similar ambitions.

Claire Bullivant of the Conservative Democratic Organisation, a group born

of members’ anger at the ousting by MPs of Boris Johnson in 2022, told
delegates of plans for an app that would exploit the party rule book; this
would trigger special branch meetings or constitutional conventions if
enough members registered their disagreement “on every policy, every
decision, daily”. It would, she said, “ensure that our MPs who we send to
Westminster aren’t Lib Dems wearing blue rosettes”.

This is another Bennite trait: the pursuit of purity over power. In 1983 Benn
notoriously declared that Labour’s crushing defeat in the general election
that year was in fact a “remarkable development”, since “a political party
with an openly socialist policy has received the support of over 8.5m
people”. At this week’s conference Ms Badenoch declared she was excited
by opposition and reckoned that insufficient conservatism was the problem,
for “when we went after Labour votes, we lost our own”. In Mr Jenrick’s
analysis, the Tory party needs more “religion”; it must have candidates “who
are actually Conservatives to their core”.

That is a recipe for ossification. Mr Jenrick, widely seen as the front-runner

in the leadership contest, announced at the conference that he would create a
“New Conservative Party” but the platform is wearily familiar. He promises
to leave the European Convention on Human Rights, an idea that he says
will “finish what Brexit started” but which has divided the party for over a
decade. He proposes legislating for a cap on migration at tens of thousands a
year, iron-cladding a target that David Cameron tried and failed to meet.

He proposes a more sceptical position on net zero, to reboot the Rwanda

deportation scheme and to get tough on woke institutions—all positions that
were at the heart of the 2024 manifesto. If there is any deep new thinking
among the Tories about Britain’s chronically low productivity and
overstretched public services, it wasn’t in evidence at the hustings.
This inward turn is a cause for quiet satisfaction in Labour circles. Sir Keir
Starmer buttered up Labour Party members in his own leadership campaign
in 2020. But his project for power has since rested on ridding Labour of
Bennite thought (promulgated most recently by Jeremy Corbyn, Sir Keir’s
predecessor as leader) and downgrading the fetishes of activists with the
mantra “country first, party second”.

So far, there is not a glimmer of so ruthless a turn against the membership

among the Tories. “Where is the change candidate? Where’s the person
writing the articles saying they need to change from top to bottom?” mused
Pat McFadden, Sir Keir’s right-hand man, last month. Bennism condemned
Labour to years in opposition. It’s not obvious why it would work any better
for the Tories. ■

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Britain | Party time

Why on earth would anyone go to a British party

conference?
A short guide to an odd political ritual
October 1st 2024

There are bow ties and waistcoats, blazers and cigars. The men have pink
faces, smooth cheeks and the air of people who would get bread rolls thrown
at them in an Evelyn Waugh adaptation. Almost everyone looks as though
they were bullied at school, or at the very least should have been. Absolutely
everyone seems drunk. It is evening at the Tory party conference.

Party conferences are an annual ritual of British politics. The shtick is

simple. Each autumn London’s political class decamps, en masse and in
turn, to regional cities like Birmingham, where they are joined by party
members, as well as assorted lobbyists and journalists. Having found
themselves somewhere so alarmingly provincial, they promptly hide from
the locals behind high fences and police cordons; drink warm white wine;
attend talks with titles like “Getting our railways back on track: Will public
ownership deliver the change we need?”; and worry that other people are
having more fun than they are. Which—given that they are in a seminar on
rail ownership in Birmingham—is a reasonable concern.

Such behaviour is striking enough to have attracted anthropological

attention. A French study from 2005 of British party conferences
approached them with the curiosity of a Victorian naturalist and heavy use of
words such as “liminal”. It found that British conferences are indeed
unusual. They stand out for their size (the Tories’ was said to be the largest
in Europe); their frequency (most countries don’t do this annually); and the
attention paid to them by the media (which has admittedly dwindled; in the
1970s the BBC offered live TV coverage from 9.30am).

History helps explain them. The first party conference was held in 1867 by
the Tories. The Second Reform Act was about to give the vote to 1m or so
more people and Tory MPs felt it might be a good idea to meet some of them.
Not, note, to listen to them. If other people despise Tory activists, that is
nothing to how the Tory politicians have historically tended to feel about
them. Arthur Balfour, who was prime minister in 1902-05, said he’d “rather
take advice from my valet than from the Conservative Party Conference”.
Tories only really had to listen to members after 1998, when they got the
power to pick their leaders.

There are two ways to think about this exodus from Westminster, which
pauses parliamentary business for three weeks. The first is that conference
season is a sober meeting of political minds. Here, policy can be debated,
leaders chosen and reputations made—or broken. Sir Tony Blair, a former
Labour leader and prime minister, said that giving his conference speech
filled him every year for 13 years with “agony, consternation [and]
madness”.

Conference season is also a serious opportunity to raise large amounts of

money through ticket sales and sponsorships. In 2023 the Tories raised
almost £7m ($9.2m) from their various conferences (smaller bashes are held
throughout the year). A business-day pass to the Tory event this year cost
£3,500; to reserve an exhibition stand at the Labour shindig cost up to
£15,000. Some stands are worthy; some are weird. Some are both. In
Liverpool Labour delegates could visit one named “Crustacean
Compassion” to hear about the welfare of decapods.

The second way to look at these events is more as political cosplay. Like a
Star Trek convention for people who happen to like Conservatives rather
than Captain Kirk, the get-together in Birmingham offers somewhere that
Tory party members can go, wear blazers and say things like “Hear hear”
without fear of mockery—a safe space for people who hate safe spaces.

It’s not just the Tories. Florence Faucher, the author of the 2005 study and a
professor of political science at Sciences Po, was shocked to realise that you
can tell which political conference is which simply “by their…ways of
dressing”. Tory conference was, she says, the first time she had “seen so
many pinstriped suits”. Labour offers bright young men in sharp blue suits
who like to talk about house building.

Reform UK offers older men in straining jackets. There is a strong smell of

aftershave and a faint whiff of menace. There is little political discussion but
there is a disco: the men circle the dance floor awkwardly, like a wedding to
which only the bad uncles have been invited. As for the Lib Dem
conference, everyone is so elderly that it feels less like a conference than a
care home with added lanyards. In its halls, people with raincoats and
earnest expressions vote on things like “Motion F32”, calling for “an
immediate bilateral ceasefire” in Gaza. Doubtless Gaza will be grateful.

What there is not much of, anywhere, is women. Tories are fond of putting
the question “What is a woman?” to the candidates in their leadership race.
Visit their conference and it starts to seem that this might be less a culture-
wars question than one of pure curiosity: there are almost none to be seen
there. This year’s Tory conference is “just men, men, men”, says Isabel
Hardman, author of “Why We Get the Wrong Politicians”. She thinks this is
due less to sexism than sensibility: women are “more economical” with their
spare time and tend not to think that spending Sunday in an “airless hall in
Birmingham” is a good use of it.

Those in the conference halls may be mildly preposterous. But they are also,
in their way, laudable: democracies would work less well if there were not
activists who were ready to leaflet, canvass and run raffles. They are also
surprisingly powerful. Members of the Labour Party chose Sir Keir Starmer,
now the prime minister, as their leader in 2020. In the past decade, two
prime ministers were appointed not by the public but by the Tory faithful; in
November they will elect the leader of the opposition. Britain’s annual party-
conference season is idiosyncratic, odd and deserving of mockery. It also
matters. ■

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Britain | A wartime diaspora

Ukrainians are settling down in Britain. That

creates a problem
A tricky decision for the new Labour government
October 3rd 2024

Picking-up time at the Ukrainian Saturday school in Welwyn Garden City is

much like picking-up time after any weekend activity, anywhere in Britain.
Parents mill about, wondering why their little darlings are taking so long.
Young children rush out and offer hugs; older ones amble. But the parents
who gather in Welwyn Garden City, north of London, are a little unusual.
The great majority are women. One of the few men has a prosthetic leg,
having lost his own doing military service.

Britain is home to about 160,000 people who were born in Ukraine, up from
40,000 before the full-scale Russian invasion in 2022, according to the
Migration Observatory at Oxford University. The Ukrainians are settling in
quickly. They have created many institutions like the school in Welwyn,
which teaches Ukraine’s language, history and culture. Their growing sense
of comfort is a tribute to them, and to Britain’s talent for absorbing
newcomers. It is also a problem for the government.

Anastasiya Sachkova, a video producer, fled Ukraine with her daughter

when the war began. A British couple hosted them: unlike asylum-seekers,
who are usually put up in hotels, the government allowed Ukrainians into
the country if natives offered to provide accommodation for six months. Ms
Sachkova gets on well with her hosts, and has continued doing her old job
remotely. For a while she expected to return to Ukraine: “Everyone thought
it was going to be temporary.” With every passing day, it feels less so.

Two-thirds of Ukrainian adults who arrived after the war started are women
(see chart); men are usually allowed to leave Ukraine only if they are old,
medically unfit or have at least three children. A survey by the Office for
National Statistics (ONS) found that 80% of the migrants have degrees. They
tend to live in wealthy parts of Britain, where homes are large and the
natives are well-disposed to refugees. Just over 1,000 Ukrainians who
arrived under the government’s sponsorship scheme live in the London
borough of Richmond upon Thames—more than in the entire city of Leeds,
which is four times as populous.
They are allowed to work, and most do. One-fifth are like Ms Sachkova,
labouring remotely in their old industries. Many of the others are
underemployed, often severely. One teacher at the Saturday school in
Welwyn Garden City, a highly experienced pedagogue with a PhD, washes
dishes for a living. But Ukrainians seem to be climbing the occupational
ladder as their English improves. New Ukrainian organisations such as
Kryla, in the West Midlands, run networking events and advise migrants on
how to set up businesses.

Increasingly, they feel settled in Britain. The ONS survey asked Ukrainians
where they would prefer to live if they believed that Ukraine was safe. In
April 68% said Britain—up from 52% a year earlier. Almost half of the
migrants have not visited Ukraine since they left. “We are integrated. Our
children are in school. We have jobs. Some of us have boyfriends,” says
Olesya Romanychenko of Kryla.

Children are adapting to British life even more quickly. After the second
world war Ukrainian émigrés set up a Saturday school in west London
known as St Mary’s (it is now planting offshoots all over Britain). For years
it mostly taught British-born children about the ancestral homeland. When
the new Ukrainians arrived in 2022, their fluency in the language was so
superior that the school held separate classes. But the youngest migrants are
already slipping. “They think in English,” says Inna Hryhorovych, the
executive head.

In some ways the British government has treated Ukrainians generously,

allowing them to work and receive benefits including medical care. But in
one sense it has been unusually stingy. Ukrainians are treated as temporary
visitors, not refugees. Many were initially allowed to stay for three years,
although they will soon be able to extend their visas by 18 months. After
five years in Britain, most foreign workers and refugees can apply for
permanent settlement, as can Hong Kongers, who entered under a special
visa scheme. But Ukrainians’ days in the country do not count.

These regulations were created by the last Tory government. They leave a
dilemma for the new Labour one, particularly if the war drags on. Is Britain
really going to tell a highly educated group of people who are rapidly
settling in, whose children are forgetting how to read and write Ukrainian,
and who tend to live in parts of the country where immigration is not too
controversial, that they must get out?■

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britain-that-creates-a-problem
Britain | Blyth spirit

Gigafactories and dashed dreams: the parable of

Blyth
What one port town says about the British economy
October 3rd 2024

The little port town of Blyth in north-east England holds up a mirror to the
British economy. For much of the 20th century it was a home to heavy
industry. By the 1960s it was exporting more coal than anywhere else in
Europe and had built the Royal Navy’s first aircraft-carrier. In the 1970s it
was importing the raw materials needed by the smelting furnace a short train
ride away. Then, as the collieries, shipyards and metalworks all closed, the
town spent decades in decline. Its long search for a new act has made it a
crucible for the policies of the previous Tory government and the new
Labour one.
When Blyth’s power station was demolished in 2003, it left behind a
desirable plot of land abutting the coast. The site is the terminus of the North
Sea Link, a cable sending clean energy to and from Norway; it also benefits
from existing sea and rail links. As part of Boris Johnson’s “levelling-up”
agenda to reduce regional inequality, the land was to be the home of
Britishvolt, a government-backed battery startup that would build a
gigafactory there. But Britishvolt, which lacked customers, investment and
expertise in battery manufacturing, collapsed into administration in 2023.
“We don’t feel very levelled up,” is the verdict of Julie Amann, a case
worker in the Citizens Advice bureau in the town centre.

That phrase was consigned to political history by the election of the Labour
government in July. But Blyth is still caught up in some grand political
ambitions. Labour’s first two “missions”, as the government’s five
overarching objectives are known, are to boost economic growth and make
Britain a green-energy superpower. Among other things, that means setting
up a national wealth fund, whose objectives include upgrades to port
infrastructure; and establishing Great British Energy, a new national energy
company whose aims include crowding in offshore-wind investment. If
these plans work, Blyth ought to benefit. It is, after all, a port, and Dogger
Bank, the world’s largest offshore wind farm, sits just off the coast.

Blyth is already home to the Offshore Renewable Energy (ORE) Catapult, a

government-backed facility supporting the offshore-wind sector, which
opened in 2013. On its campus, the ORE validates and tests the designs of giant
offshore turbines and blades for global firms like General Electric, Siemens
and Vestas. Before the election it won £86m ($109m) of government money
to upgrade its facilities.

Companies have started to coalesce in the facility’s orbit. Tony Quinn, who
is in charge of technology development at the ORE, cites the example of JDR
Cables, a Polish company that makes the subsea cables needed to hook wind
farms up to the grid. JDR is building a new factory nearby, to manufacture the
cables required by bigger, more powerful turbines, which will head to
nearby sites like Dogger Bank. Private firms are drawn to the ORE‘s state-of-
the-art facilities to test and develop drones and robots for unmanned offshore
maintenance in the dry dock that was once home to HMS Ark Royal.
To return Blyth to its heyday as a thriving industrial town would require
more than a handful of small, high-tech companies, however. Speak to the
locals fishing on the quayside and few can tell you what takes place in the
ORE’s colossal blue hanger across the water. But many do voice their

disappointment over the 3,000-or-so permanent jobs that Britishvolt was

meant to have directly created.

The parcel of land once destined for battery manufacturing is now

earmarked for another industry of the future. Unfettered access to clean
energy makes the site a no-brainer for power-hungry data centres. Plans to
build a £10bn “hyperscale” artificial-intelligence data centre, backed by
Blackstone, a huge private-equity firm, are working their way through the
planning system. Sir Keir Starmer trumpeted the project on a recent visit to
New York.

Not everyone likes the idea. The data centre would create fewer direct jobs
than a gigafactory—around 400 of them. Chris McDonald, a Labour MP with
a background in business, has warned that not exploiting the location for its
unique industrial properties could create “long-lasting economic damage for
the region”.

But planning reforms are also central to the new government’s growth
agenda. It quickly signalled its support for other data centres whose
applications had become mired in bureaucracy; in September it designated
data centres as critical national infrastructure. A short drive out of town to
the derelict Britishvolt site serves as a cautionary tale of grand designs that
fail to materialise. An early test of Labour’s ambitions will be its ability
finally to turn Blyth’s imagined future into a real one. ■

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parable-of-blyth
Britain | The wheels of justice

The scourge of stolen bikes in Britain

An experiment in Liverpool shows how the police can tackle bike theft
September 30th 2024

ON A SUMMER’S day in Southport, in north-west England, the Merseyside

police were on the hunt for stolen bikes. Their suspicions were raised by a
“well-known male”, recently out of prison, on a notably pricey bicycle.
Officers stopped him, entered the bike’s details into a database and rang the
owner, who had been under the impression his bike was locked up outside
his workplace. It had been recovered before he’d realised it had gone.

The Merseyside police force is the first in England and Wales to experiment
with routine stops of cyclists. It has carried out more than 4,000 checks in
the past year. But its example is likely to spread. Bike theft is a blight in
many British cities. Around 200,000 bikes were reported stolen in England
and Wales last year; the real number is much higher because many thefts go
unreported, and bikes taken in burglaries are usually not separately recorded
as bike thefts. Very few are ever recovered. In London more than 90% of
bike thefts in 2022 went unsolved, leading some politicians to complain that
it has been “effectively decriminalised”.

This is not just a pain for their owners. Stolen bikes and e-bikes have also
become the getaway vehicle of choice for thieves, according to the
Merseyside police. In one way or another, some 80% of acquisitive crime in
Liverpool involves a nicked bike.

That is bad for cities, which have built thousands of miles of cycle lanes in
recent years. The likelihood of having a bike stolen still puts many would-be
riders off, says James Brown of BikeRegister, a company which sells
security-marking kits, which tend to include a unique code that is hard to
remove. Others give up after having one or two bikes stolen.

It is also corrosive of trust in the police. The “broken-windows theory”—

coined by two American criminologists, James Q. Wilson and George
Kelling, in the 1980s—held that visible signs of crime often lead to more
serious wrongdoing. As bikes have grown more popular, their stripped
carcasses have become one of the more obvious signs that low-level crime is
permitted. Cyclists complain that, even when they find their stolen bike on a
second-hand website, the police won’t help.

Part of the problem is simply that police are stretched. Community policing
has been pared back, making brazen street theft less risky. For those officers
tasked with investigating crimes, the loss of a treasured two-wheeler can be
a long way down the list. As home security has made burglary harder and
more people have taken to getting around on flashy rides, bikes have
become an attractive target.

Titus Halliwell of the Metropolitan Police Service in London reckons

stealing them is now the most “low-risk, high-reward” crime. In the capital
crafty thieves are shifting towards battery-powered angle grinders, which get
through the best locks in seconds (slow learners elsewhere still seem to rely
on primitive bolt-cutters). Many work in gangs that are practised at getting
rid of stolen goods quickly. “You only need to steal four bikes a week and
sell them for £250 each and you’re making £50k a year tax-free,” notes Mr
Halliwell.

But the Merseyside example also shows how things can be turned around
comparatively quickly. Between July 2023 and July 2024 the pilot project
saw reported thefts fall by 46% compared with the previous year. Pippa
Wilcox, the constable in charge, explains that as well as stopping suspicious
riders the police have helped to get thousands of bikes across the city
marked, either by retailers or through events at schools and workplaces. The
aim is to make stolen bikes “too hot to handle”.

Linking bike theft to other crimes has helped win the support of her
colleagues. Officers have a phone app that lets them search a database of
marked bikes. They like the fact that when they are searching someone’s
property on suspicion of drug offences, they can also try and bust them for
bike theft. Returning bikes to surprised owners, sometimes aided by social
media, has boosted local confidence in policing, says Ms Wilcox.
Merseyside’s approach is being recommended to other forces.

Two regulatory changes would help. The first is creating a requirement for
manufacturers and retailers to mark new bikes. The French government did
that in 2021; three years on, around a third of all bikes are marked. The
second is to put more pressure on online platforms such as Gumtree and
Facebook to ensure they are not marketplaces for stolen goods, by for
example requiring sellers to include security-marking codes. Bike thieves
may be enjoying a smooth ride at the moment. It could be punctured rather
easily. ■

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Britain | Burning ambition

Britain’s last coal-fired power station closes

The end of an era
September 29th 2024

On September 30th water vapour will rise from the eight giant cooling
towers at Ratcliffe-on-Soar in Nottinghamshire for the final time. The
closure of Britain’s last coal-fired power plant is the end, in effect, of an
industry that has played a critical role in shaping the country’s economy over
three centuries. It is also testament to a remarkably successful drive to stamp
down on the dirtiest source of carbon emissions.
Coal powered the Industrial Revolution. The world’s first coal-fired power
station began operating in London in 1882. When Britain first built out an
electricity grid in the 1920s, it was the burning of coal that lit people’s
homes. As demand for electricity grew, many coal-fired plants, including the
one in Ratcliffe-on-Soar, were built in the country’s mining heartlands in the
1960s and 1970s.
Britain’s ability to shift away from coal was partly due to luck. The
discovery of abundant gas in the North Sea, and the subsequent “dash for
gas” in the 1980s and 1990s, reduced its dependence on coal. But the rapid
shift away from the fuel in recent decades—a much more dramatic change
than in other G7 countries (see chart 1)—has been the result of deliberate
policies designed to boost renewables, particularly offshore wind, and to
phase out coal-fired power generation. Over the past five years Britain has
passed weeks, and even months, without needing to burn any coal for
electricity (see chart 2). Now it will be for good. ■

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station-closes
Britain | Bagehot

How British-Nigerians quietly made their way to

the top
A story of modern migration has had extraordinary results
October 2nd 2024

At Akoko, an upscale restaurant in central London, Nigerian staples such as

moi-moi, a stodgy bean pudding, and mosa, a savoury doughnut made from
overripe plantain, become fine dining. Staff shuttle steaming bowls of jollof
rice across the restaurant to clients paying £120 ($160) for a tasting menu,
plus another £95 for a wine pairing. (A shorter £55 lunch menu exists for the
time-pressed, the tightwads and those husbanding expense accounts.) This
year Akoko won its first Michelin star. It was joined by Chishuru, another
Nigerian joint. Its owner, Adejoké Bakare, has gone from being a have-a-go
chef working out of a temporary spot in Brixton Market in south London to
a Michelin-star-winning West End mainstay in barely four years.
What is happening in food is happening elsewhere. From politics to
YouTube to sport to music, members of Britain’s Nigerian diaspora have
established themselves in the country’s elite. “That beaming West African
mothers are now such a regular fixture on award-show red carpets and stages
tells its own story,” points out Jimi Famurewa in “Settlers”, a recent
memoir-cum-history of black African London. A Nigerian moment has
begun.

British-Nigerians are curiously overlooked in the folk tales Britain tells itself
about immigration. There is no iconic episode to match the arrival of HMT
Empire Windrush, the boat that brought a few hundred people from the West
Indies in 1948, points out David Olusoga, a historian (himself a British-
Nigerian). They lack the numbers of, say, British-Indians or the geographic
spread of Poles. Instead, theirs is a prosaic story of modern migration.
Airplanes bearing the parents of future chefs, footballers, politicians and
musicians arrived in steady numbers throughout the 1980s and 1990s. The
results, however, are extraordinary.

Michelin stars are just the start of it. British-Nigerians have put their stamp
on the country’s music scene. Grime, probably the most influential British
genre in the past few decades, was shaped by British-Nigerians. Or as
Skepta, who won the Mercury Prize, a prestigious award, in 2016, put it:
“I’m a badboy from Nigeria/Not St Lucia/Joseph Junior Adenuga/Big lips,
African hooter.” Skepta’s brother, JME, is another well-known MC; their sister,
Julie, is a prominent DJ. It is not just a family affair. Four of the eight
Mercury Prize winners since Skepta have had Nigerian heritage.

Much of their success can be traced to geography. All the recent British-
Nigerian Mercury winners were raised in London, which is the heart of the
country’s Nigerian population. A home in the British capital is often vital to
making it into Britain’s creative elite, whether that is in wealthy
Hammersmith or, as in the case of the Adenugas, on a council estate in
Tottenham. What is big in London becomes big in Britain. A niche genre
like grime can spread from pirate radio to critical acclaim in a few years.

Bukayo Saka, a British-Nigerian who plays football for England and

Arsenal, is another London boy made good. Mr Saka is the golden child of a
golden generation of England players. No profile is complete without a
mention of the fact that Mr Saka achieved four A*s and three As in his GCSE
exams. Homework was done during the 90-minute drive from West Ealing
to Arsenal’s academy ground in Hale End.

That application is a typical British-Nigerian story. For a demonstration,

head to any train station in south-east London during term time, says Mr
Famurewa. While commuters head into central London, British-Nigerian
children in oversize blazers travel often absurd distances in the other
direction to outer London boroughs and Kent, which still have selective
grammar schools. Not everyone can play for England but anyone can hop on
the 7.30am train to Gravesend (providing they have the grades).

An emphasis on education as a path to prosperity is hardly uncommon. What

made the Nigerian influx different was that many arrivals were pretty
middle-class to begin with. Kemi Badenoch, one of four remaining
challengers for the Conservative Party leadership, is a case in point. Her
father was a doctor, her mother a professor. In one sense, Ms Badenoch’s
rise to the cabinet in the previous government is extraordinary. In another, it
is becoming normal: another middle-class British-Nigerian was determined
to enter Britain’s elite and succeeded.

Britain’s Nigerian elite proves an often overlooked rule. Ethnic minorities

who make it into “Who’s Who”, a guide to the powerful in Britain, are
slightly more likely to come from middle-class families (rather than a
working-class background) than their white peers, according to “Born to
Rule: The Making and Remaking of the British Elite”, a new book. It is
those with plenty of privilege who tend to make it to the top. KSI, or Olajide
Olatunji to his mother, is Britain’s most influential YouTuber; he boasts 24m
subscribers and an empire that ranges from boxing matches to Prime, a
sickly drink. KSI started life as a YouTuber as a private-school boy from
Watford. When asked once if he felt Nigerian, KSI replied: “If I’m getting my
extended family asking for money, I feel pretty Nigerian; when I’m going to
a private school, I feel pretty British.” Skim the biography of a prominent
British-Nigerian and you will often find the name of a prominent public
school.

From Lagos to Latymer Upper

Judging a group by the cream of its crop has its limits, just as Michelin-
starred restaurants reveal only so much about the dietary habits of a country
at large. Last year alone about 141,000 Nigerians arrived in Britain,
predominantly to do low-paid jobs in areas such as social care. Their tale
will be different. But the story of the British-Nigerian elite is a simple one.
They are generally middle-class, always well-educated (often privately) and
predominantly from London. Why are there so many British-Nigerians in
the British elite? Because, often, they look just like the rest of it. ■

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their-way-to-the-top
Business
AI and globalisation are shaking up software developers’ world
Will America’s government try to break up Google?
Workouts for the face are a growing business
Transit vans are the key to Ford’s future
India’s consumers are changing how they buy
What makes a good manager?
The future of the Chinese consumer—in three glasses
Business | Changing the program

AI and globalisation are shaking up software

developers’ world
Their code will get cheaper. So might they
September 29th 2024

Two big shifts are under way in the world of software development. Since
the launch of ChatGPT in 2022, bosses have been falling over themselves to try
to find ways to use generative artificial intelligence (AI). Most efforts have
yielded little, but one exception is programming. Surveys suggest that
developers around the world find generative AI so useful that already about
two-fifths of them use it.
The profession is changing in another way, too. A growing share of the
world’s engineers come from emerging markets. There is no standard
definition of a developer, but one way to assess this is to look at the number
of users of Github, a popular platform for storing and sharing code. In 2020
the number of users living in poorer countries surpassed those from the rich
world. On the same measure, in the next few years India is expected to
overtake America as the world’s biggest pool of programming talent (see
chart 1).
These shifts matter because software talent is greatly treasured. Salaries are
high (see chart 2). The median wage of a developer in America sits in the
top 5% of all occupations, meaning that coders can earn more than nuclear
engineers. Technology giants need them to make their platforms more
attractive; non-tech company bosses want ever more coders to aid the
digitisation efforts that, they hope, will improve productivity and increase
the appeal of their products to consumers. The future looks to be one with
more, and more productive, coders—and cheaper software.

New technologies have often aided developers; the internet, for instance,
ended the time-consuming task of answering questions using textbooks.
Generative AI looks like a bigger leap forward still. One reason why it can be
especially useful for developers is the availability of data. Online forums,
such as Stack Overflow, hold enormous archives of questions asked and
answered by coders. The answers are often rated, which helps AI models learn
what is helpful and what is not. Coding is also full of feedback loops and
tests that check if software works properly, notes Nathan Benaich, of Air
Street Capital, a venture-capital (VC) firm. AI models can use this feedback to
learn and improve.

The consequence has been an explosion of new tools to help programmers.

PitchBook, a data provider, tracks some 250 startups making them. Big tech
is leading the charge. In June 2022 GitHub, which is owned by Microsoft,
launched Copilot. Like many tools it can, when prompted, spit out lines of
code. Around 2m people pay for a subscription, including employees at 90%
of Fortune 100 firms. In 2023 Alphabet (Google’s parent company) and
Meta (Facebook’s parent) released rivals. This year Amazon and Apple
followed suit. Many firms have built AI coding tools for internal use, too.

’s helpfulness is still somewhat limited, however. When Evans Data, a

AI

research firm, asked coders how much time the technology tends to save
them, the most popular answer, given by 35% of respondents, was between
10% and 20%. Some of this is from churning out simple “boilerplate” code,
but the tools are not perfect. One study from GitClear, a software firm,
found that over the past year or so the quality of code has declined. It
suspects the use of AI models is to blame. A survey by Synk, a cybersecurity
firm, found that more than half of organisations said they had discovered
security issues with poor AI-generated code. And AI still can’t tackle the
thornier programming problems.

The next generation of tools should be better. In June Anthropic, an AI startup,

released its newest model, Claude 3.5 Sonnet, which is better than
predecessors at, among other things, coding. On September 12th OpenAI, the
maker of ChatGPT, launched a version of its latest model, o1, claiming that it
“excels at accurately generating and debugging complex code”.

AI tools can increasingly help with other mundane tasks (“toil” in coder-
speak), such as writing notes about what the code does or designing tests to
make sure code won’t malfunction. Writing code is only a part of the job of
a software engineer, accounting for about 40% of their time, according to
Bain, a consultancy. The tools might also help programmers become more
flexible by switching between coding languages faster, allowing them to
apply their skills to different situations more easily. Euro Beinat of Prosus,
an investment firm, says that he has seen engineers move from one language
to another in a week rather than three months. Amazon recently said that it
saved $260m when it converted thousands of applications from one type of
code to another using AI.

The new-found flexibility extends to different types of programming. A

small app may previously have required a team of six working on different
parts of the program, such as the user interface or the software’s plumbing.
Jennifer Li, of Andreessen Horowitz, a big VC firm, says she is seeing more
startups with fewer people, as programmers can more easily take on many
different tasks. Plenty of IT managers say that training newly hired developers
on the idiosyncrasies of their firm’s software is getting faster, too.

Much of this seems to give inexperienced engineers a leg up (see chart 3).
They will be able to do more complex tasks more quickly and some of the
work they used to do may be picked up by laymen. A rising trend towards
“low-code-no-code” platforms, which allow anyone to write software, will
also be boosted by AI. Banco do Brasil, a lender in Brazil, has been using
such a system to allow employees to develop hundreds of apps, such as ones
that make it easier to help customers seeking insurance products.

Another result of the coding upheaval is that junior developers in rich

countries will face more acute competition from abroad. According to Evans
Data, between 2023 and 2029 the number of computer programmers in the
Asia-Pacific region and Latin America is expected to rise by 21% and 17%
respectively, compared with 13% in North America and 9% in Europe. The
imbalance means a boom in offshoring and outsourcing is likely to continue.
Everest, a consultancy, reckons that about half of all IT spending is
outsourced, including lots of software development. Other firms that have
kept IT services in house have instead set up their own outposts abroad, to
take advantage of lower wage costs. India is the world’s powerhouse. In
2023 exports of software and related services amounted to $193bn, with half
going to America.

This helps companies control costs. “It is a very good way of scaling out…
without blowing up budgets,” says Shashi Menon, who is in charge of the
digital efforts for Schlumberger, an oil-and-gas services firm. About half of
his engineering team are based in Beijing and Pune in India.

Offshore capabilities have been growing more sophisticated. Some foreign

outposts now provide basic software as well as high-end fare. Sanjeev Jain
of Wipro, an Indian firm, says his engineers helped build Teams, Microsoft’s
video-streaming service, as well as designing chips and software for
“connected cars”, which speak to other services and devices. AI could help
offshore firms produce snazzier software; AI nous itself is also something they
can sell. Infosys, another Indian firm, recently said that it had won a $2bn
five-year contract to supply AI and automation services to an unnamed client.

Cracking the code

What all this means for developers is still unclear. One vision is of AI and
offshoring taking Western software developers’ jobs en masse. That seems
far-fetched. Huge amounts of technical know-how are still required to string
pieces of code together and check that it works.

A more optimistic view is one in which the most boring parts of making
software are done by computers while a developer’s time is spent on more
complex and valuable problems. This may be closer to the truth. For
customers, meanwhile, the trends are welcome. IT managers have long said
that their bosses want ever more digitisation with ever tighter budgets.
Thanks to AI and offshoring, that may no longer be too much to ask.■

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software-developers-world
Business | Pound of flesh

Will America’s government try to break up

Google?
Antitrust remedies that target its generative-AI ambitions are more likely
October 3rd 2024

For years shareholders have paid little heed to the thunderbolts hurled at
America’s west-coast technology giants by the trustbusting deities of
Washington, DC. No longer. Despite expectations of solidly rising profits, the
share price of Alphabet, Google’s parent company, is wobbling (see chart).
The reasons seem paradoxical. On the one hand, an American judge ruled in
August that Google’s search business, source of about 90% of its operating
income, was an illegal monopoly. On the other, investors fear that it could
suffer unprecedented competition because of generative artificial
intelligence (AI). On October 8th the Department of Justice (DoJ) is expected
to file proposed remedies that aim to redress the sins of the past and prevent
future abuse in generative AI.

The DoJ appears eager to make an example of Google. Jonathan Kanter, the
agency’s trustbuster-in-chief, has said the verdict belongs on the “Mount
Rushmore” of antitrust cases. Leaks to the media have suggested he could
go as far as asking the court to break up Google by separating its search
engine from its Chrome browser and Android operating system. That would
be America’s biggest anti-monopolistic act since an unsuccessful attempt to
carve up Microsoft almost 25 years ago.

Amit Mehta, the judge handling the case, is likely to have other
considerations. A breakup may be too draconian for him. The nub of his
ruling was that Google benefited from a monopoly on search and text-based
advertisements that it furthered through “exclusionary” distribution deals
with companies like Apple; Google’s size alone was not the issue. Moreover,
his verdict against Google was based largely around precedents set in the
Microsoft trial. The fact that the decision to break up Microsoft was quashed
on appeal has been a deterrent to far-reaching “structural” remedies ever
since.

Like Mr Kanter, Mr Mehta appears keen to address not just Google’s market
distortions of the past but also to consider how they will play out in the
generative-AI era. For that, targeted remedies may be more likely. An obvious
one would be to ban the payments that Google makes for its place as a
default search engine on many devices and carriers, which in 2021 came to
$26bn. But that would penalise the recipients of Google’s cash more than
Google, even though they were not in the dock.

More likely, Google may be required to continue the payments but without
the exclusions. This, says Mark Shmulik of Bernstein, a broker, could help
spur competition, especially when it comes to generative AI. It would, for
instance, give Apple latitude to direct more searches through OpenAI’s
ChatGPT, with which it is shortly due to start an AI partnership called Apple
Intelligence. Further helping rivals, Google could be forced to share some
data it relies on to make its search business so powerful, including its huge
volume of search queries. Google considers such data troves its secret sauce;
it will argue that making them publicly available raises privacy and security
concerns. But such obligations could be a fillip for firms trying to launch
generative-AI capabilities to compete with Google, such as Perplexity.

Alphabet has vowed to appeal the verdict and the process may drag on for
years. In the meantime, the going will be tough. In addition to illegal use of
the default payments, the judge found Google guilty of using its monopoly
power to push up the price of text advertisements, which could spur a wave
of potentially costly lawsuits from advertisers and rivals.

All this is occurring while the business model of search is changing

profoundly. Generative AI is eroding the power of selling ads based on
clicking links. So far, Google’s ad business has withstood the hit. But this is
a bad time to be distracted by lengthy legal wrangling. Perhaps better to try
to settle fast and move on. ■

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break-up-google
Business | If the face is fit…

Workouts for the face are a growing business

They may not help much in the quest for eternal youth
October 3rd 2024

The FaceGym studio in central London looks more like a hair salon than a
fitness studio. Customers recline on chairs while staff pummel their faces
with squishy balls. They use their knuckles to “warm up” skin and muscles;
give it a “cardio” session to improve circulation; and then a deep-tissue
massage. Customers, who spend at least £100 ($133), say they leave with
less puffy cheeks and more defined jaw lines.

The booming market for facial workouts offers the hope of looking younger
and more chiselled. A third of Britons who had a non-invasive facial
treatment in 2023 had or were interested in having a face workout, says
Mintel, a research firm. Their growing popularity may be a result of
customers frowning at conventional facials, which involve lathering with
lotions and invasive cosmetic procedures. Inge Theron, Facegym’s founder,
got into facial workouts after a having “thread lift”, which uses temporary
sutures, that went wrong.

Facial workouts could be lucrative if they grab even a sliver of a market for
injectable procedures, such as botox and fillers, that will be worth over $5bn
in North America in 2025, according to McKinsey, a consultancy. It will
help that the clientele is not limited to the usual spa-goer. At Face Flex in
Dubai 45% of customers are male, says Nikisha Singh, a co-founder of the
firm, attracted by the idea that this is a form of exercise.

Faces can be worked out at home, too. Apps such as Luvly provide
personalised instructions for the stretching and contortions of face yoga.
Tools are also a big business. Social media is filled with videos of dewy-
skinned women scraping at their faces with rollers made of jade or rose
quartz. These can cost from $3 to over $100. Facegym sells a wand, which
sends small electric pulses into the skin, for £633.

What of sceptics who raise a quizzical eyebrow? Dermatologists warn that

touching your face too much can give you acne and stretching the skin could
create wrinkles. There isn’t enough rigorous research into the effects of face
workouts but, as Suzanne Olbricht, a dermatologist at Harvard Medical
School, puts it, they probably can’t hurt. ■

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business
Business | Road trip

Transit vans are the key to Ford’s future

And they earn big profits today
October 3rd 2024

It is hard to imagine a place where Jim Farley, boss of Ford, might feel more
comfortable discussing his company’s future than at the wheel of one of his
firm’s vehicles. Mr Farley, pictured, whose driving skills have been honed
racing Ford Mustangs in his spare time, fields questions with the same
assurance that he pilots a Transit van down a winding Austrian mountain
road. The three-day road trip in late August, from Ford’s European
headquarters in Germany to Italy, in a convoy of four Transits, was arranged
by Mr Farley to assess in detail one of the firm’s best-selling vehicles as well
as to meet dealers and customers along the way.

As well he might. Ford Pro, the commercial-vehicle division, is the most

successful part of the company. Selling Transits and commercial versions of
Ford’s pickups brought an operating profit of $5.5bn in the first half of 2024,
nearly three times that of Ford Blue, the part of the firm making passenger
vehicles powered by internal combustion, despite selling around half as
many vehicles. Operating margins of 15.9% are far fatter than Blue’s 4.3%,
and on a level with what Porsche makes selling pricey sports cars.

Yet Mr Farley insists that Ford Pro’s contribution is about far more than
profits. The “super users” who purchase commercial vehicles are “the most
important customers that signal the future capability of the company”.
Commercial vehicles are a vital signpost both for electrification and the
software that will increasingly matter to car buyers.

Commercial buyers, who care most about “dollars and cents”, currently have
a far greater appetite for software than retail customers. Digital tools that can
process real-time data from the vehicles ensure that drivers using battery
power plug in at the right times, or predict when maintenance is needed.
Because the buyer and user of the vehicle are often different, monitoring
drivers and coaching those who are too hard on brakes or accelerate too
quickly can save companies money.

Remote monitoring also helps with “uptime”. In a darkened room at Ford’s

Technical Centre, the global home of research and development for the
Transit located in Dunton, around 30 miles (50km) from London, a wall-
mounted screen measuring nine metres by two resembles what might be
required for a military strike or a space mission. It is alive with real-time
data monitoring vehicle health to ensure that the right maintenance is done
speedily by dealers, so vehicles are out of service for the shortest time
possible. There are now four more such operations rooms located across
Europe.

The benefits are clear. Services enabled by software now make up 15% of
profits at Pro, and should rise to 20% by 2026. Mr Farley claims Ford is five
years ahead of rivals in this respect and that it is also a useful test bed for
similar services for retail customers in the future. He notes that dedicated
telematics companies, which do similar monitoring jobs, cannot directly
control speeding because they do not own the vehicles. He can, and this is a
service that worried parents might purchase to tame young drivers.
Electrification is also speeding ahead for Ford’s commercial customers who
are “not scared to pay a little more upfront” for pricier EVs. Usage data also
allows Ford to advise customers on which parts of their fleet might be better
served with full electric or hybrid vehicles. A one-stop shop for busy smaller
fleet owners gives an all-in cost including charging and servicing. But Mr
Farley is also prepared to learn about other reasons for going electric. An
Austrian baker encountered en route noted that he was turning his fleet of
Fords to battery power because the mountain roads around Innsbruck eat
through brakes on his fossil-fuel powered Transits, but do far better with the
regenerative system on EVs.

Ford’s commercial arm may be speeding ahead, but the company still needs
to make smaller and cheaper EVs to attract mainstream drivers and turn a
profit. Its EV division is set to lose up to $5.5bn this year. Ford is betting on
“commercial and small” says Mr Farley. Rather than follow competitors
which have struck deals with Chinese carmakers for software and EV know-
how, Ford is relying on a “skunkworks” to make affordable vehicles that are
“fully competitive” with the likes of China’s BYD, a maker of low-cost EVs, by
designing more efficient electric components in-house and using cheaper
battery chemistry.

The next generation of software-stuffed electric vehicles emerging from the

skunkworks will start with a smaller electric pickup, followed by a van and
large pickup trucks over the next two or three years. This is where Ford has
a competitive advantage. More to the point, Mr Farley thinks that in ten
years’ time all car buyers will want the same sort of vehicles, software and
services as the baker and other customers he met on his trip. And all roads,
he hopes, will lead to Ford.■

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future
Business | Instantaneous consumption

India’s consumers are changing how they buy

A giant population turns to deliveries
October 3rd 2024

The gridlocked streets of India’s big cities are not blocked to everything.
Tiny scooters laden with packages slip past cars, jump traffic lights and
bounce over what pavements exist. Goods range from a tub of ice cream or a
handful of pomegranate seeds to a coffee pot or even an iPhone. Such two-
wheeled delivery services have taken off over the past four years, often
promising to bring items in ten minutes in cities where it can take that time
to cross a busy street.

Three companies dominate this business: Zomato, Zepto and Swiggy, which
on September 26th announced an initial public offering that may value the
firm at $15bn. Although that outshines the $12bn valuation accorded to
Zomato when it listed in 2021, Swiggy has some catching up to do. Zomato
is valued at $28bn today, and is now earning money, having made a net
profit of $73m over the past four quarters. Swiggy lost $285m in the fiscal
year to March, but that is at least an improvement on losses of $520m in the
previous year.

Investors may be seduced by Swiggy’s growth to date. In three years

revenues have nearly doubled to $1.4bn, as the number of users has swollen
from 35m to 47m. The number of riders, paid a mere 69 cents per order, has
almost doubled since 2022 to 457,000. Each delivers on average 463
packages a month. Since 2022 four warehouses have expanded to 50 and
Swiggy has built nearly 540 “dark stores”, which exist only to fulfil online
orders, are packed with common items and are positioned to ensure fast
deliveries.

The convenience of a doorstep service is not limited to the many Indians

living in tiny homes, where rapid deliveries save devoting space to storage.
Rather than reaching into a cupboard, people can now swipe on an app. But
the number of restaurants whose orders are delivered through Swiggy has
also jumped, from 129,000 in 2022 to 224,000 by the end of June. The
opportunity to satisfy the rapidly growing taste for fast delivery has drawn in
competitors beyond Swiggy and its rivals. Restaurants would rather skip
Swiggy’s cut of up to 18% of the value of meals. Amazon and Flipkart excel
at logistics and can deliver almost anything, albeit not quite as fast.

Competition is not Swiggy’s only concern. As its prospectus notes, fast

delivery depends on the hygiene and quality of the companies whose
deliveries it carries, but over which it has little control. Swiggy also faces a
mountain of legal claims, ranging from lacking a proper business licence and
non-payment of a goods-and-service tax to not making proper pension
contributions and experiencing delays in processing refunds. It even faces an
investigation by the competition authorities. But such obstacles in India are
as common as the potholes Swiggy’s riders have to skirt, and none seems to
worry investors. More important is that Indians evidently, and increasingly,
prefer a trip to the front door over a trip to the shops.■

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they-buy
Business | Bartleby

What makes a good manager?

Hint: not someone who says I am a good manager
October 3rd 2024

The Ig Nobel awards, an annual ceremony for laugh-out-loud scientific

papers, celebrate the joyfully improbable nature of much academic research.
One of this year’s Ig Nobel winners, “Factors involved in the ejection of
milk”, was published in 1941 and tests whether fear causes cows to
involuntarily drain their udders. Its authors drew their conclusions by
placing a cat on a cow’s back and repeatedly exploding paper bags beside it.
“Genetic determinism and hemispheric influence in hair whorl formation”,
another winner, asks whether hair tends to swirl in the same direction
depending on which hemisphere you live in.

Sometimes you come across an academic paper that asks a deeply practical
question in a refreshingly plain way. “How do you find a good manager?”, a
new study by Ben Weidmann of the Harvard Kennedy School and his co-
authors, sits in this category. Answering that question well is important.
Other research, to say nothing of the experience of everybody everywhere,
shows that variations in the quality of management help explain differences
in performance between companies and even between countries.

Yet a survey conducted last year by the Chartered Management Institute in

Britain found that four in every five people entering management had
received no formal training. And loads of bosses accrue managerial
responsibilities for reasons unrelated to their ability to discharge them.
Another paper, by Alan Benson of the Carlson School of Management and
his co-authors, looked at the career paths of thousands of sales workers in
over 200 American firms. They found that better sales performance
increased the likelihood of people being promoted but was also associated
with worse performance among their new subordinates. The “Peter
Principle”, the idea that people rise up the ladder if they do their current job
well until they reach a job at which they are incompetent, appears to be alive
and well.

How then should managers be selected? The study by Mr Weidmann et al

sought to answer that question by running a series of repeated experiments
in which participants were randomly assigned to three-person teams of one
manager and two subordinates. Each member of the team, including the
manager, had to complete a number of problem-solving tasks. The
manager’s job was to assign people to the task they were most suited to;
monitor their performance and reassign them as needed; and keep them
motivated. In the real world bosses do more things, but this captures a big
part of their role.

The researchers found that a competent manager had about twice as much
impact on the team’s performance as a competent worker. More usefully,
they also found out which traits were associated with good and bad
managerial performance. Teams run by people who said they really, really
wanted to be managers performed worse than those who were assigned to
lead them by chance. Self-promoting types tended to be overconfident about
their own abilities; in a huge shock, they also tended to be men.
If appointing a manager just because he sticks his hand up and says he can
read people is not a great selection strategy, what would be better? The
researchers found that good managerial outcomes were associated with
certain skills. One in particular stood out: people who did well on a test of
economic IQ developed by researchers at Harvard called the “assignment
game”, in which you have to quickly spot patterns in the performance data
of fictional workers and match them to the tasks they are best at. (Anyone
can play the game online: you end up with a percentile score and a mild
headache.)

Since the assignment game is similar to the experiment in the study, you
would expect people who were good at one to shine in the other. But for
David Deming, also of the Harvard Kennedy School and another of the
paper’s authors, that is precisely the point. Management tasks can be
identified, codified and incorporated into selection processes: that is a better
way of choosing bosses than drawing only on those who thrust themselves
forward or looking at how people perform in other jobs.

There are echoes here of a paper by Alessandro Pluchino of the University

of Catania and his co-authors, who found that it was better to promote
people at random than based on how well they did their current role. That
won an Ig Nobel in 2010. Just because something is funny doesn’t mean it
should be dismissed. ■

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Business | Schumpeter

The future of the Chinese consumer—in three

glasses
What China’s biggest distiller, brewer and water-bottler say about its
economy
October 1st 2024

TO WESTERN PALATES baijiu is an acquired taste—and most never

acquire it. China’s national fire water, at first whiff redolent of cheap potato
vodka with a soupçon of fish sauce, is just too pungently unfamiliar. But
whatever foreign investors plied with the stuff by their Chinese business
partners make of the flavour, they appear to be lapping up shares in its
makers.

Since China’s government announced a cocktail of policies to stimulate

domestic consumption in late September, baijiu stocks have gone on a
bender. Over the course of a week the biggest, Kweichow Moutai, gained
nearly $90bn in market value—equivalent to a whole Diageo, the West’s top
distiller, washed down with a Kirin. It is worth a cool $313bn, more than
Coca-Cola. Throw in its six main rivals, also up by 40% or so, and the
market capitalisation of big baijiu exceeds half a trillion dollars.

It is not just the distillers who are benefiting from the week-long rally. The
share prices of large Chinese brewers look just as frothy. That of Nongfu
Spring, China’s biggest water-bottler, has increased by a third. This
compares with a rise of 25% for the CSI 300 index of mainland blue chips as a
whole. In China, the way to an investor’s heart suddenly appears to be
through the throat. Will it all end in a nasty hangover?

Not necessarily. There is a lot to admire about the Chinese beverage industry
—most of all, its eye-watering profitability. Consider China’s most valuable
producers of baijiu, water and beer, respectively. Last year 92% of
Kweichow Moutai’s nearly 150bn yuan ($21bn) in sales was pure gross
profit. For Diageo the figure was 60%. In terms of operating margin, Nongfu
(at 33%) bests digital titans like Alphabet, Google’s parent company (31%),
and Tencent, China’s most valuable firm (30%), let alone rival water-pedlars
such as Danone, owner of Evian (13%). Bud APAC, the listed Asian subsidiary
of the world’s mightiest brewer, AB InBev, offers a better return on capital
than its Belgian-American parent.

All three firms are placing an interesting wager. When hundreds of millions
of Chinese shoppers first came into some disposable income a couple of
decades ago, they were happy to try any product in any category. Many
customers are now becoming more discerning, not least because of a
slowdown in the property market and a hit to sentiment. The stimulus at
least offers hope of lifting the gloom. Some Chinese are still willing to part
with their money, notes Euan McLeish of Bernstein, a broker. But the three
are also hoping to make themselves especially indispensable to customers,
by standing out on quality.

This task is simplest for the baijiu company. It controls 94% of the market
for the very finest hooch, which sells for 1,200 yuan or more per half-litre
bottle. It is distilled in Guizhou province and matured in ancient cellars.
Virtually no other company has such facilities—or, given that the most
coveted sort dates back to the Ming dynasty, which ended in 1644, any
chance of getting their hands on one for another few centuries. Kweichow
Moutai also enjoys a decades-old reputation as the go-to tipple at the top
table of the Politburo or the People’s Liberation Army; its trademark white,
red and gold bottle was a rare concession to branding even when Maoism
was at its greyest. As a result, the company can spend less on marketing than
its rivals, reckons Morningstar, a research firm. Kweichow Moutai’s mastery
lies in maintaining scarcity and a nationwide distribution network, recently
bolstered by a digital platform that enables it to respond to demand from
retailers and other buyers in real time.

Nongfu, by contrast, has built a brand from scratch. Since its founding in
1996 it has marketed its core product as natural spring water from idyllic
sources. This sets it apart from the distilled variety sold by many
competitors—and enables it to charge a premium. The company is
diversifying into other ready-to-drink beverages such as sugar-free tea and
juices, which today account for around half of revenues, up from 40% in
2019. As with its spring water, these appeal to health nuts—a cohort that,
unlike China’s population as a whole, keeps multiplying.

The health benefits of Budweiser are less clear-cut. Still, it and its fancier
sister brands, such as Corona, Hoegaarden and Goose Island, make up for it
by offering Chinese drinkers a dose of exclusivity. In contrast to budget
beers, sales of which have been declining for several years, the thirst for
fancier pints persists. Bud APAC’s closest rival in this category is CR Beer, which
distributes Heineken in the country. But most of CR Beer’s products have been
engineered to be cheaper than water, as Mr McLeish puts it. Another
competitor, Tsingtao, tried to lift its flagship brand to premium status with
the help of new packaging and celebrity singers. When their fame proved
fleeting, so did the strategy.

Bottle shock
Kweichow Moutai, Nongfu and Bud APAC are banking on two developments.
The first is the continued proliferation of high-earners. This looks like a safe
bet. The ranks of Chinese bringing home on average $95,000 a year
increased by 7% annually between 2017 and 2022, to 93m people, according
to Bernstein. By 2027 they could number more than 120m. Another 200m
entry-level premium shoppers may make $26,000, up from 170m two years
ago. Together that would be nearly the current population of America.

The drinks trio’s second assumption is that those high-earners will open their
wallets as readily as Americans do. Their recent reluctance to spend has
worsened China’s deflation and spooked investors fearful of its dampening
effect on earnings; the three firms’ share prices remain below their highs of
four or five years ago despite the latest surge. But as long as Chinese
incomes grow, consumers will fancy a tipple. Those still holding their nose
rather than investing could soon instead be taking a snifter. ■

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in-three-glasses
Finance & economics
Xi Jinping’s belated stimulus has reset the mood in Chinese markets
Why is Canada’s economy falling behind America’s?
A tonne of public debt is never made public
Can Andrea Orcel, Europe’s star banker, create a super-bank?
The house-price supercycle is just getting going
Why economic warfare nearly always misses its target
Finance & economics | Good-vibes rally

Xi Jinping’s belated stimulus has reset the mood in

Chinese markets
But can the buying frenzy last?
October 2nd 2024

If CHINESE RETAIL investors had their way they would forgo the seven-day National
Day holiday that ends on October 7th. An aggressive stimulus package,
announced in Beijing on September 24th, has unleashed the biggest weekly
stockmarket rally the country has witnessed in more than 15 years. Major
indices have soared more than 25%; the Shanghai stock exchange has
suffered glitches under the volume of buying activity. The prospect of
halting for a full week has made netizens anxious: “We must keep trading;
we must cancel National Day,” one young investor screamed into a video
widely shared on WeChat, a social-media platform.
The package, unveiled by top regulators, included a policy-rate cut,
mortgage-rate cuts and 800bn yuan ($114bn) in support of the stockmarket.
Two days later a meeting of the Politburo, a group of China’s 24 most senior
leaders, drove the point home by using phrases such as “action comes first”,
rather than the passive verbiage repeated in recent years. At another high-
level meeting on September 29th Li Qiang, China’s premier, pledged to
speed up the implementation of easing measures.

Some 2trn yuan in fiscal spending for consumer handouts and local-
government refinancing, as well as 1trn yuan to recapitalise banks, have
been reported but not announced formally. Debate over the effectiveness and
scale of this long-awaited bail-out has raged. But local and foreign investors
agree on one point: Xi Jinping, China’s supreme leader, has finally woken
up to the severe problems ailing China’s economy and changed his approach
to fix them.

The effect has been to instantly lift the gloom that has hung over the country
after hopes of a strong post-pandemic recovery faded in mid-2023. One
article circulating on September 30th told how a young retail trader made
520,000 yuan that very morning. Stock-picking tips have flooded social
media even though most stocks listed in China and Hong Kong have surged.
All the while investors have ignored gloomy economic news, such as data
released on September 27th that showed industrial profits tumbling by
almost 17%, year on year, in August. Even as ChiNext, the Shenzhen stock
exchange’s main index, surged by 15% on September 30th, a survey of
purchasing managers suggested that manufacturing activity continued to
contract.

Few companies have performed poorly enough to be left out of the rally.
Although China’s securities brokers have been slammed by probes and
restrictions for several years, the share price of Citic Securities, one of
China’s biggest brokers, has doubled since the stimulus was announced.
Shimao Group, one major developer that faced liquidation earlier this year,
has more than quadrupled. Listed education firms have jumped. Tech
analysts even make out a reset for China’s biggest internet firms, such as
Alibaba and Tencent, the share prices of which have more than halved since
2021. This revaluation of China writ large is bound to continue when trading
resumes on October 8th. Just days ago the world was short on everything
China-related, says Stephen Jen of Eurizon SLJ Capital, an asset manager.
“Could the bingeing on Chinese equities be complete in one week?” he asks.
“I doubt it.”

The shift has given foreign investors whiplash. Just four days before
unleashing the stimulus, the People’s Bank of China (PBoC), the central bank,
declined to cut rates, causing many investors to sell down more of their
Chinese holdings. And yet with indices such as the CSI 300, a key local
benchmark, soaring by 25% in the five trading days after the package was
announced, China’s weighting in the MSCI Emerging Markets index has risen
by 3.7 percentage points, points out Christopher Wood of Jefferies, an
investment bank. Many foreign investors who track the index will be pushed
back into Chinese stocks.

The plan to prop up China’s markets comprises two novel tools. Institutional
investors will be allowed to pledge stocks, exchange-traded funds (ETFs) and
bonds as collateral to the central bank in exchange for up to 500bn yuan-
worth of government bonds and central-bank bills. The proceeds from these
must be used exclusively for buying stocks. The PBoC will also make available
300bn yuan in loans to corporations for repurchasing their own shares. Pan
Gongsheng, its governor, has signalled that this could be just the first of
three tranches of liquidity. Asked during a press conference whether
authorities would employ a “market-stabilisation fund”—a state vehicle
created solely for buying shares—Mr Pan replied that such an option was
being studied.

A key question for the coming months is whether financial wonks have been
given a greater role in this new policy-making cycle, and whether or not that
matters. Mr Xi’s time in power has witnessed the steady sidelining of
reformers and a demotion of pragmatic, pro-growth policymaking in
exchange for ideology and a national-security obsession. One source of
market euphoria, notes a Shanghai-based portfolio manager, is that “more
decision-making power could be handed back to the technocrats”.

The man overseeing the rally is Wu Qing, who took over the top securities
regulatory job after a market crash in January and February shredded his
predecessor’s career. Mr Wu has been labelled both a “firefighter” for his
ability to handle disasters, and a “butcher” for harsh penalties imposed on
bad actors. Many hedge-fund managers have come to view him as the latter.
Regulators have often punished short sellers or anyone appearing to make
money from market routs. Mr Wu has overseen increasingly stringent rules
for high-frequency trading and demanded higher asset thresholds for funds
to operate.

It is unclear if foreign investors should take comfort from the emboldening

of a senior technocrat such as Mr Wu. Rather than promote a broader range
of trading tools that support liquidity and help investors hedge their bets, his
tenure has seen many small funds close and foreign investors drastically
draw down their exposures to China. On his watch China’s stock exchanges
have stopped reporting daily cross-border investment flows.

The news and rumours of redoubled support were designed to make a big
splash in markets. But the gloomy sentiment and sagging asset prices that
once prevailed must be distinguished from the fundamentally poor economic
indicators that continue to materialise. The authorities have bet that these
factors are so tightly linked that, by breaking the downward spiral in
sentiment, they will eventually prevent shares and house prices from falling,
ultimately lifting the economy. By boosting asset prices they can also buoy
sentiment, creating a virtuous cycle. Until September many Chinese people
experienced a negative wealth effect as the value of their homes and other
investments slid. Now that effect is starting to reverse, at least for stock
investors.

Perhaps the biggest risk to this plan is its reliance on good vibes. It lacks
solutions to China’s pressing problems, such as its property woes. Sentiment
might not be lifted for long were these to persist in the background, notes
Larry Hu of Macquarie, a bank. If house prices and sales keep falling, stocks
should follow.

The property market is far from being fixed. Figures from a private data
provider released on October 1st showed that the value of new-home sales
among the 100 largest developers fell by 38% in September, year on year,
from 27% in August. The government’s pitch to the people is that the
downturn has bottomed out, notes Andrew Collier of GlobalSource Partners,
a consultancy. This clashes with what is happening on the ground, he says. A
fundamental shift in China’s political economy is needed to solve its biggest
problems.

In the coming weeks there is plenty of money to be made in Chinese stocks,

says one investor in Singapore who has gone all in. But if bad economic data
continues to trickle in over the course of the year, China risks yet another
monumental market sell-off. That, the investor notes, could spoil sentiment
well into 2025. It would also make further attempts at market rescues a
harder sell. ■

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Finance & economics | Economic decoupling

Why is Canada’s economy falling behind

America’s?
The country was slightly richer than Montana in 2019. Now it is just
poorer than Alabama
September 30th 2024

The economies of Canada and America are joined at the hip. Some $2bn of
trade and 400,000 people cross their 9,000km of shared border every day.
Canadians on the west coast do more day trips to nearby Seattle than to
distant Toronto. No wonder the two economies have largely moved in
lockstep in recent decades: between 2009 and 2019 America’s GDP grew by
27%; Canada’s expanded by 25%.
Yet since the pandemic North America’s two richest countries have
diverged. By the end of 2024 America’s economy is expected to be 11%
bigger than five years before; Canada’s will have grown by just 6%. The
difference is starker once population growth is accounted for. The IMF
forecasts that Canada’s national income per head, equivalent to around 80%
of America’s in the decade before the pandemic, will be just 70% of its
neighbour’s in 2025, the lowest for decades. Were Canada’s ten provinces
and three territories an American state, they would have gone from being
slightly richer than Montana, America’s ninth-poorest state, to being a bit
worse off than Alabama, the fourth-poorest.

The performance gap owes little to covid-19 itself. Canada did have a deeper
recession than America after covid struck, partly because of stricter and
longer lockdowns. Its GDP fell by 5% in 2020, compared with 2.2% in
America. But Canada soon caught up. The country’s national income grew
by 4% between 2019 and 2022, nearly on par with America’s, which
expanded by 5% over the period.

Instead the divergence is more recent: since 2022 America’s economy has
motored ahead, leaving Canada’s in the dust. The reason is not some bump
on the road but what lies under the bonnet. Two drivers of Canadian growth
have sputtered.
The first of these is the services industry, which makes up about 70% of
Canada’s GDP. In the aftermath of the pandemic Americans splurged on goods,
which boosted manufacturers north of the border (American consumers
gobble up around 40% of Canadian factories’ output). But they have since
switched back to spending on domestic services. “The composition of
American growth hasn’t been favourable to Canada,” says Nathan Janzen of
Royal Bank of Canada (RBC), a bank. The job of powering Canada’s economy,
therefore, falls even more to its own services sector, which relies on demand
from Canadian households and the government.

Unfortunately, that demand has been throttled by higher interest rates.

Monetary policy has had more “traction” in Canada than in America, says
Tiff Macklem, the central-bank governor. In the latter, most mortgages are
fixed for 30 years, whereas in Canada they are typically set for five. A
greater share of Canadians than Americans have already seen their mortgage
payments rise. This is all the more painful as Canadian households bear
more debt, relative to income, than anywhere in the G7 club of large, rich
countries. They now fork out an average 15% of their income to pay back
debt, up one percentage point since 2019. And unlike Uncle Sam, Canada’s
government has not tried to soften the blow by loosening the purse strings. It
ran a deficit of just 1.1% of GDP in 2023, compared with 6.3% in America.

The second faltering growth driver is Canada’s petroleum industry, which

accounts for 16% of exports. Canada underinvested in new production for
years after 2014, when a collapse in oil prices hurt its fuel-dependent
economy. In America, by contrast, oil-producing states suffered but
consumers cheered. When prices spiked after Russia invaded Ukraine,
investors did more to support American shalemen; the country’s crude
output has rocketed. It was one-quarter higher in the first seven months of
2024 than it was during the same period six years ago. Canada’s has grown
by only 11% over the same period.

Oil’s decline penalises Canada’s economy at large, because it is one of the

country’s most productive sectors. That adds to a long-standing productivity
problem. Growth in output per hour worked across Canada has been
sluggish for two decades. It increasingly resembles Europe rather than
America, which has benefited from a tech boom that has largely eluded
Canada. Its GDP per capita since the pandemic has risen more slowly than that
of every other G7 country bar Germany.

What Canada lacked in productivity it could long make up by having more

workers, thanks to high immigration. Between 2014 and 2019 its population
grew twice as fast as America’s. Canada has historically been good at
integrating migrants into its economy, lifting its GDP and tax take. But
integration takes time, especially when migrants come in record numbers.
Recently immigration has sped up, and the newcomers seem less skilled than
immigrants who came before. In 2024 Canada saw the strongest population
growth since 1957. Many arrivals are classified as “temporary residents”,
including low-skilled workers and students. They are more likely to be
unemployed or in low-earning jobs, dampening growth in income per
person. Canada’s unemployment rate rose to 6.6% in August, from 5.1% in
April 2023.

Take all this together and it is clear that the seeds of the decoupling were
sown much earlier than the pandemic, with sagging services the latest in a
series of ailments. There are no quick fixes. Canada’s central bank has cut
interest rates three times so far this year, from 5% in May to 4.25% today.
But many borrowers will still feel worse off because they have yet to renew
their mortgages. Immigration restrictions have been introduced, including a
cap on international students, but that won’t solve Canada’s chronic
productivity problem. Catching up to Alabama may soon seem like a distant
dream. ■

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Finance & economics | Unaccountable accounts

A tonne of public debt is never made public

New research suggests governments routinely hide their borrowing
October 3rd 2024

How much money has Senegal borrowed? More than previously thought,
according to Ousmane Sonko, who became its prime minister in April. At a
press conference on September 26th he said the previous government had
“lied to the people” by hiding loans worth 10% of GDP, enough to push the
country’s public debt to 83% of national income. Since a full audit has not
yet been published, it is hard to know what numbers to believe. The IMF,
which has a $1.9bn bail-out programme with Senegal, is not pleased.

This sort of confusion is surprisingly common. Some governments struggle

to keep track of everything they owe, such as the debts of state-owned firms,
which often borrow with abandon. Others tap creditors in secret to avoid
scrutiny. Since 1970 governments in the global south have accrued at least
$1trn in external debt that was not reported to the World Bank when it was
contracted, according to a new study by researchers at the World Bank, the
University of Duisburg-Essen and the University of Notre Dame. That
amounts to more than 12% of their foreign borrowing, in all currencies, over
that period.

The researchers reach this figure by tracking revisions to the World Bank’s
external-debt statistics, which are based on reporting from debtor
governments. About 70% of all debt-stock estimates are amended after
initial publication. Most changes are small and presumably innocent. But
upward revisions are larger than downward ones, suggesting systematic
underreporting. By definition, hidden debts can be counted only when they
are revealed, so their true value may be higher still.

There is little misreporting of World Bank loans, which are routinely

disclosed, or of bonds, which are publicly traded. The largest revisions relate
to other kinds of borrowing from private lenders, such as bank credit, or
bilateral loans from governments. Hidden debts accumulate when economies
are booming, and are more likely to be exposed when growth slows, as
countries default or seek help from the IMF. In the last few years debt
revelations have surged as countries grapple with the financial fallout from
covid-19 (better reporting may also explain some of the rise). The 2022
edition of the World Bank’s debt statistics made upward revisions of more
than $200bn to past data, the largest increase in history (see chart).

The worst cases of hidden debt are corruption rackets. In Mozambique, for
example, state-backed firms secretly borrowed $1.2bn in a scheme
engineered by Credit Suisse bankers, government officials and a Lebanese
shipbuilding firm. When the debt was revealed in 2016 the economy
crashed. Many of the perpetrators, who had taken kickbacks, are now behind
bars. In August the finance minister who signed off the deals was convicted
of fraud and money-laundering by a court in New York.

Opaque borrowing also hinders debt restructuring. Sometimes it can take

months for conflicting spreadsheets to be reconciled by hand. Confusion
about the true level of Zambia’s debt exacerbated distrust between its
Western and Chinese creditors when it first sought restructuring in 2020, a
process which dragged on until this year. The figure reported for its debt in
2021 has since been revised upwards by more than $3bn, or 14% of GDP. In
general, the researchers find that countries spend a longer period in default
when hidden debts are involved.

A straightforward way to increase transparency would be to require it by

law. A recent IMF survey of 60 countries, from Albania to Zimbabwe, found
that barely half have legislation obliging governments to submit debt-
management reports to parliament, and hardly any require the publication of
terms of sovereign loans. Another problem is the overuse of confidentiality
clauses in many debt contracts, which go beyond what might be justified by
commercial sensitivity.

Lenders also bear responsibility. In 2019 the Institute of International

Finance, a club of financiers, developed a set of principles for private
creditors to voluntarily disclose their lending to governments. But only two
banks ever listed information about their loans on the public registry
established for the purpose (one of them was Credit Suisse after the
Mozambique affair, as it sought to clean up its reputation). The registry
records no loans agreed this year. An investigation last year by Debt Justice,
a British campaign group, estimated that at least $37bn of loans should have
been published, compared with just $2.9bn that had been recorded at the
time.
Campaigners suggest that sovereign-loan contracts should be unenforceable
in court if they are not publicly disclosed within 30 days of signature. That
could be achieved with legal tweaks in England and New York, where
international debt cases are usually heard. It would not eliminate the
problem, but it would be a start. ■

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is-never-made-public
Finance & economics | Buttonwood

Can Andrea Orcel, Europe’s star banker, create a

super-bank?
An interview with the boss of UniCredit
October 3rd 2024

The CAREER of Andrea Orcel vividly encapsulates the recent history of

European banking. At Merrill Lynch, now part of Bank of America, Mr
Orcel advised on deals that formed part of the wave of mergers that crested
in 2007, when a pan-European troika bought ABN AMRO, a Dutch lender. After the
financial crisis of 2007-09, grand cross-border ambitions were ditched. Mr
Orcel’s next job was to run the investment-banking arm of UBS, a Swiss
champion.

After an abortive move to Santander, a Spanish bank, Mr Orcel landed on

his loafers in the top job at UniCredit in 2021, shortly before interest-rate
rises bounced the sector back to profitability. He is justifiably credited with
the Italian lender’s resurgence; its share price has quadrupled since he was
appointed. Now his designs on Commerzbank, a German lender, are testing
the EU’s appetite for the integrated financial system its leaders say it needs.

On September 11th UniCredit said it had bought a 4.5% stake in

Commerzbank from the German government, adding to its pre-existing
position of the same size. Speaking to your columnist in Prague, where Mr
Orcel had travelled to address colleagues in the grounds of the Strahov
Monastery, the banker says he was surprised by the explosive political
reaction that followed his bank’s investment. “We bought that stake
transparently, with respect to our position and our intentions, in a process
that was also transparent. We had every reason to assume that this was a
welcome investment.” Since then UniCredit, through derivatives trades, has
increased its position in the bank to just above 21%. Olaf Scholz, Germany’s
chancellor, has fulminated against “unfriendly attacks” on the country’s
lenders. One member of Commerzbank’s board says he is nauseated by the
prospect of Mr Orcel cutting costs at the bank.

UniCredit’s German expedition is less surprising to analysts, who have long

predicted consolidation in the country’s banking industry. Bosses of both
firms have, in the past, talked about combining Commerzbank with
HypoVereinsbank, the German lender UniCredit bought in 2005, according
to Mr Orcel. They are “almost a perfect match” for each other, he says,
noting the lack of overlap in states such as Bavaria. Mr Orcel reckons a
combined bank would have a 10% share servicing corporate clients,
reaching perhaps the low teens in the Mittelstand, Germany’s dense fabric of
small firms. All to the good, he says: Europe’s economic competitiveness
remains blunted by the lack of strong, pan-European lenders.

It is a compelling pitch, and one Mr Orcel makes energetically. But if

UniCredit’s investment in Commerzbank becomes a takeover bid, investors
are likely to pay less attention to potential revenue “synergies” than to
reductions in the combined bank’s costs. Should that involve firing many
workers, expect politicians to shelve their calls for ambitious continental
renewal. Few doubt that Commerzbank could be run more profitably. During
the most recent quarter, UniCredit’s cost-to-income ratio in Germany was 20
percentage points lower than that of Commerzbank as a whole. That’s a
cavernous gap—even considering Commerzbank’s larger retail business. Mr
Orcel says management staff at the corporate centre would bear the brunt of
the cuts, implying few branch closures.

Mr Orcel says he has not hired investment bankers to prepare for a deal. If
he does, how might Commerzbank prepare its defence? It would be unwise
for it to rely on the European Central Bank limiting UniCredit’s
shareholding, or the German government using its remaining 12% stake to
hinder a deal. And there are few signs of a white knight galloping up the
autobahn to give it more cover. Last week Bettina Orlopp, Commerzbank’s
new boss, raised the bank’s profit guidance and pledged more shareholder
pay-outs. But investors are cagey. The bank has a history of making rosy
forecasts which it then misses.

If Mr Orcel ends up creating a European champion, he will then have to run

it. The lack of a complete banking union would be a headache. So might
politics around a merged entity in Germany. Is there a scenario where
UniBank becomes CommerzCredit? Mr Orcel rejects the idea of moving a
combined bank’s headquarters to Germany. The bank is “very, very proud”
of its Italian roots, he says; moving north would be yielding to political
pressure. Besides, Italians seem no more willing to give up their banking
stars than their German friends.■

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europes-star-banker-create-a-super-bank
Finance & economics | Block party

The house-price supercycle is just getting going

Why property prices could keep rising for years
October 1st 2024

After THE financial crisis of 2007-09, global house prices fell by 6% in real
terms. But, before long, they picked up again, and sailed past their pre-crisis
peak. When covid-19 struck, economists reckoned a property crash was on
the way. In fact there was a boom, with mask-wearing house-hunters
fighting over desirable nests. And then from 2021 onwards, as central banks
raised interest rates to defeat inflation, fears mounted of a house-price horror
show. In fact, real prices fell by just 5.6%—and now they are rising fast
again. Housing seems to have a remarkable ability to keep appreciating,
whatever the weather. It will probably defy gravity even more insolently in
the coming years.
The history of housing involves a once-unremarkable asset class turning into
the world’s largest. Until about 1950, the rich world’s house prices were
steady in real terms (see chart 1). Builders put up houses where people
wanted them, preventing prices from rising much in response to demand.
The roll-out of infrastructure in the 19th and early 20th centuries also helped
temper prices, argues a paper by David Miles, formerly of the Bank of
England, and James Sefton of Imperial College London. By allowing people
to live farther from their place of work, better transport increased the amount
of economically useful land, reducing competition for space in urban
centres.

Events that followed the second world war turned all these processes on
their heads, creating the housing supercycle that we live with today.
Governments got into the business of subsidising mortgages. People in their
20s and 30s were having many children, boosting the need for housing.
Urbanisation raised demand for shelter in places that were already crowded.

The second half of the 20th century brought a slew of land-use regulations
and anti-development philosophies. It became harder to build infrastructure,
making cities less expandable. Metropolises that had once built housing with
aplomb, from London to New York, applied the brakes. Across the rich
world, construction of houses expressed as a share of the population peaked
in the 1960s, then fell steadily to about half its level today. House prices
began to move inexorably upwards.

The past few years have been less disruptive to housing markets than even
optimistic forecasters were predicting three years ago. As central bankers
have raised rates, many mortgage-holders have not felt a thing. Before and
during the pandemic many had loaded up on fixed-rate mortgages, shielding
them from higher rates. In America, where many people fix their mortgage-
interest rate for 30 years, households’ mortgage-interest payments, as a share
of income, remain steady (see chart 2). New buyers are facing higher
mortgage costs. But rapid earnings growth is helping counteract this effect.
Wages across the G10 group of countries are 20% higher than they were in
2019.

Not everywhere has emerged unscathed. In Germany, New Zealand and

Sweden real house prices have tumbled by more than 20% since pandemic
peaks. Yet in other places, house prices only dropped a bit, and a boom of
sorts is under way. American house prices reach new highs nearly every
month, having risen by 5% in nominal terms in the past year. In Portugal
prices are soaring. Other places with weak housing markets are turning them
around. From 2011 to 2019 house prices in Rome fell by more than 30% in
nominal terms, as Italy dealt with a sovereign-debt crisis. Now they are
rising again.

In the short term house prices will probably keep rising. Falling interest rates
help. In America the rate on a 30-year fixed mortgage has fallen by close to
1.5 percentage points from its recent peak. In Europe a wave of fixed-rate
borrowers will soon be able to refinance at lower rates, as central banks cut
their policy rates. But there are deeper forces at work, too. Three factors will
ensure that, for decades to come, the housing supercycle endures.

The first relates to demography. We calculate that the rich world’s foreign-
born population is rising at an annual rate of 4%, the fastest growth on
record. Immigrants need a place to live, which, research suggests, tends to
lift both rents and house prices. A recent paper by Rosa Sanchis-Guarner of
Barcelona University, looking at Spain, finds that a one-percentage-point
rise in the immigration rate boosts average house prices by 3.3%.

In response to record arrivals, politicians from Canada to Germany are

clamping down on immigration. But even under the strictest policies, rich
countries will probably continue to receive more migrants than they used to.
Their need to cater to an ageing population is likely to overwhelm a desire to
tighten borders. Goldman Sachs, a bank, reckons that if Kamala Harris wins
the American presidential election, net immigration will fall gently, to 1.5m
per year from well over 2m in 2024. If Donald Trump wins with a split
government, they expect it will fall only to 1.25m.

The second factor relates to cities. When covid-19 struck in 2020, many
people thought that urban areas would lose their shine. The rise of remote
work meant that, in theory, people could live anywhere and work from
home, enabling them to buy roomier housing for less money.
It has not worked out that way. People work from home a lot more than they
used to, but big cities retain their draw. In America 37% of businesses are
located in large urban areas, the same share as in 2019. We calculate that the
share of the rich world’s overall employment taking place in capital cities
has grown in recent years (see chart 3). In Japan, South Korea and Turkey,
more jobs are created in capitals than elsewhere. They are also home to more
fun: the share of Britain’s bars and pubs located in London has risen a tad
since before the pandemic. All this raises competition for living space in
compact urban centres, where the supply of housing is already constrained.
The city’s triumph compounds the effects of the third factor: infrastructure.
In many cities commuting has become more torturous, limiting how far
people can live from their job. In Britain, average travel speeds have fallen
by 5% in the past decade (see chart 4). In many American cities congestion
is close to an all-time high, according to data from the Texas A&M
Transportation Institute, a research group. Many governments find it nearly
impossible to build new transport networks to lighten the load. California’s
high-speed rail, meant to link Los Angeles and San Francisco and much
potential living space in between, will probably never be built.

Some economists hope that a YIMBYish turn is afoot. Those people who say
“yes” to having new housing “in my backyard” have won the argument, and
appear to have converted some politicians. A few places are following the
YIMBY playbook of changing land-use rules to encourage building. In early

2022 housebuilding permissions in New Zealand hit an all-time high,

helping deflate property prices.

Beyond New Zealand, however, the YIMBY influence remains marginal. A

paper by Knut Are Aastveit, Bruno Albuquerque and André Anundsen, three
economists, finds American housing “supply elasticities”—the extent to
which construction responds to higher demand—have fallen since the 2000s.
We find no evidence of a generalised uptick in construction since the
pandemic. The supply problem remains most acute in cities, where
regulations are strictest. In San Jose, America’s priciest city, just 7,000
houses were authorised for construction last year, well down on the rate a
decade ago. But even in Houston and Miami, which pride themselves on
avoiding the mistakes made by other big cities, building is slow.

Over the coming years housing markets could face all sorts of slings and
arrows, from swings in economic growth and interest rates to banking busts.
But with the long-term effects of demography, urban economics and
infrastructure aligning, consider a prediction made in 2017 by Messrs Miles
and Sefton. It finds that “in many countries it is plausible that house prices
could now persistently rise faster than incomes”. The world’s biggest asset
class is likely to get ever bigger. ■

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supercycle-is-just-getting-going
Finance & economics | Free exchange

Why economic warfare nearly always misses its

target
There is no such thing as a strategic commodity
October 3rd 2024

Between August and October 1943 American warplanes repeatedly bombed

Schweinfurt, in southern Germany. The Bavarian town did not host army HQs
or a major garrison. But it produced half of the Third Reich’s supply of ball
bearings, used to keep axles rotating in everything from aircraft and tank
engines to automatic rifles. To Allied planners, who had spent months
studying the input-output tables of German industry, the minuscule
manufacturing part had the trappings of a strategic commodity. Knock away
Germany’s ability to make them, the thinking went, and its military-
industrial complex would come crashing down.
The operation was costly for the Americans, with heavy losses of aircraft
and crew. But it was effective: in just a few months Bavaria’s ball-bearing
prowess was reduced to rubble. Yet soon it became clear that, despite
Schweinfurt’s obliteration, German factories kept cranking out
Messerschmitts and machine guns at just the same pace. America’s Strategic
Bombing Survey, carried out in the aftermath of the war, found “no evidence
that the attacks...had any measurable effect on essential war production”.

In the decades since, versions of this story have played out many times, most
recently with America’s sanctions against Russia and its measures against
China. Adversaries in both cold and hot wars have tried to deprive each
other of a strategic commodity, only to succeed in one sense (access to that
commodity was reduced) and fail in another (the crunch did not bring about
economic collapse or military capitulation). In a book to be published next
year, Mark Harrison and Stephen Broadberry, two British scholars, use a
theory first set out in the 1960s by Mancur Olson, an economist, to explain
this paradox. The concept of a strategic commodity, they argue, is an
illusion.

A good is often described as “strategic”, “vital” or “critical” when it is

thought to have few substitutes. America and China have strategic reserves
of petroleum, because their leaders think oil cannot easily be replaced, at
least in the short run. Some minerals are deemed critical because you cannot
build a viable electric car without them. But Olson reckoned very few goods,
if any, are truly strategic. Instead, there are only strategic needs: feeding a
population, moving supplies, producing weapons. And no amount of
pounding, literal or figurative, seems able to alter the target countries’ ability
to meet those needs, one way or another.

To understand why that is, return to the classic definition of what,

supposedly, constitutes a strategic good. The starting premise is that a class
of goods exists for which there are no substitutes. But substitutes nearly
always exist; and if a good really cannot be replaced in the short term, in the
longer run it almost always can be. Make a commodity scarce or dear
enough, a microeconomist might infer, and the mix of inputs needed to
produce output start shifting naturally.
The way Germany responded to its wartime ball-bearing crunch illustrates
these mechanics. It was quickly discovered that, in many cases where
manufacturers used to swear by ball bearings, simple bearings would suffice.
For the uses that remained, extensive stockpiles could be drawn upon, which
bought time to build replacement plants and, eventually, engineer ball
bearings out of many military supplies.

The lesson Olson took from all this is that the cost imposed on those losing
access to a resource, however key, is not the sudden collapse of every
industry that depends on it but the more affordable cost of finding
workarounds. Over time such costs usually accrue, slowing growth, but they
are hardly ever enough to capsize an economy. This suggests that another
commonly used economic concept—that of the “supply chain”—is too
narrow at best. Modern economies look more like webs, where the severing
of one link is rarely sufficient to compromise the entire structure.

Olson could not have foreseen that economic warfare would develop into the
sophisticated tit-for-tat of trade and financial sanctions that has been on full
display since Russia’s full-scale invasion of Ukraine in 2022. The
commodities those target come in many forms, from credit and energy to
“dual-use” goods and software. Their aim, not always explicit, is generally
to change the behaviour of their targets and deter others from mimicking
them. Export restrictions work directly, by blocking shipments of certain
goods to the problematic party, while other sanctions seek to limit access to
hard currency by making it harder for their targets to export lucrative goods.
Often a combination is used.

Despite its growing complexity, however, this economic arsenal—largely

controlled by America—has mostly misfired. Early attempts were already
disappointing. A study in 2007 by researchers at the Peterson Institute for
International Economics looked at 174 sanctions campaigns waged
worldwide between 1915 and 2000, of which 162 took place after 1945. It
found that such sanctions achieved their goals in part or in whole in only
one-third of all cases. Success was more likely when goals were narrowly
defined, the target state was already economically weak and there was no
history of previous antagonism with the enforcing party.
The net effect
This explains why sanctions against Russia, a hostile state flush with cash,
were never going to meet their broad goals. In 2022 excitable analysts
predicted that Russia was on the brink of a 1998 moment (when it slid into
financial chaos) or even a 1917-style revolution (when economic implosion
caused the end of tsarism). The resilience of Russia’s economy has
confounded expectations. It has dodged sanctions partly by substituting
goods it could no longer source. It also found new trading buddies—not
least China—to replace those it had lost. In a webby world, the notion of
“strategic partner” looks increasingly transient, too. ■

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nearly-always-misses-its-target
Science & technology
An adult fruit fly brain has been mapped—human brains could follow
Why it’s so hard to tell which climate policies actually work
Isolated communities are more at risk of rare genetic diseases
AI offers an intriguing new way to diagnose mental-health conditions
Science & technology | On the fly

An adult fruit fly brain has been mapped—human

brains could follow
For now, it is the most sophisticated connectome ever made
October 2nd 2024

FRUIT FLIES are smart. For a start—the clue is in the name—they can fly.
They can also flirt; fight; form complex, long-term memories of their
surroundings; and even warn one another about the presence of unseen
dangers, such as parasitic wasps.

They do each of these things on the basis of sophisticated processing of

sound, smell, touch and vision, organised and run by a brain composed of
about 140,000 neurons—more than the 300 or so found in a nematode
worm, but far fewer than the 86bn of a human brain, or even the 70m in a
mouse. This tractable but non-trivial level of complexity has made fruit flies
an attractive target for those who would like to build a “connectome” of an
animal brain—a three-dimensional map of all its neurons and the
connections between them. That attraction is enhanced by fruit flies already
being among the most studied and best understood animals on Earth.

For many years the race to assemble an adult fly connectome seemed likely
to be won by the FlyEM project at the Howard Hughes Medical Institute’s
Janelia Research Campus, in Virginia. In 2020 FlyEM’s researchers, led by
Gerry Rubin, a veteran fly biologist, published a connectome of an adult
fruit-fly “hemibrain”, a set of 27,000 neurons in the middle of the organ.
This was followed in 2023 by a connectome of the 3,016 neurons of a first-
instar fly larva—the tiny grub that emerges from an egg. But Janelia has
been pipped at the post to create a connectome of a complete brain by a
group called FlyWire, based at Princeton University. Ironically, Flywire has
used data collected by Janelia but abandoned in 2018 for being too difficult
to analyse with the artificial-intelligence (AI) software available at the time.

Mala Murthy and Sebastian Seung, FlyWire’s creators, however, had

different AI software. They started the project in 2018 with the backing of the
BRAIN Initiative (an attempt by America’s government to do for neuroscience

what the Human Genome Project did for genetics) to analyse Janelia’s now-
abandoned data. The outcome, published this week in Nature, is a model
which paints a detailed picture of a female fly’s brain with 139,255 neurons,
and locates some 54.5m synaptic connections between them.

Creating a connectome means taking things apart and putting them back
together. The taking apart uses an electron microscope to record the brain as
a series of slices. The putting back together uses AI software to trace the
neurons’ multiple projections across slices, recognising and recording
connections as it does so.

Janelia’s researchers had developed two ways of doing these things. The
FlyEM team used a beam of gallium atoms to blast away nanometres of tissue
from a brain sample and then record an image of each newly exposed
surface with a scanning electron microscope (which fires a beam of
electrons at a surface and detects any radiation subsequently emitted). Their
own fruit-fly connectome, of a male, should be ready within a year.
Janelia’s second method involved shaving layers from a sample with a
diamond knife and recording them using a transmission electron microscope
(which sends its beam through the target rather than scanning its surface).
This is the data used by FlyWire. With Janelia’s library of 21m images made
in this way, Dr Murthy and Dr Seung, ably assisted by 622 researchers from
146 laboratories around the world (as well as 15 enthusiastic “citizen
scientist” video-gamers, who helped proofread and annotate the results), bet
their software-writing credibility on being able to stitch the images together
into a connectome. Which they did.

Besides the numbers of neurons and synapses in the fly brain, FlyWire’s
researchers have also counted the number of types of neurons (8,577) and
calculated the combined length (149.2 metres) of the message-carrying
axons that connect cells. More important still, they have enabled the
elucidation not only of a neuron’s links with its nearest neighbours, but also
the links those neurons have with those farther afield. Neural circuitry can
thus be studied in its entirety. The project’s researchers have more than
doubled the number of known cell types in the fly’s all-important optic
lobes, and shown how the new cell types connect in circuits that deal with
different elements of vision, including motion, objects and colours.

This sort of thing is scientifically interesting. But to justify the dollars spent
on them, projects such as FlyEM and FlyWire should also serve two practical
goals. One is to improve the technology of connectome construction, so that
it can be used on larger and larger targets—eventually, perhaps, including
the brains of Homo sapiens. The other is to discover to what extent non-
human brains can act as models for human ones (in particular, models that
can be experimented on in ways that will be approved by ethics
committees).

Here, evolutionary biology gets involved. Fruit flies and humans are on
opposite sides of a 670m-year-old division splitting bilaterally symmetrical
animals into two groups: protostomes and deuterostomes. This separation
almost certainly predates the evolution of brains, meaning the brains of
insects (which are protostomes) and those of vertebrates (deuterostomes)
have separate origins. Drawing conclusions about the one from the other is
thus a risky business.
This should not matter for long. Several groups are currently working on
mouse connectomes, bits of which have already been put together. Though
Janelia has no plans to go in this direction, Dr Rubin (who is, along with
several other researchers from Janelia, a co-author of part of the package of
nine Nature papers) reckons a complete mouse connectome could be created
in a decade if someone were willing to stump up $1bn to pay for it. By
analogy with the Human Genome Project, where the technology became
steadily cheaper as things scaled up, this would also bring down the cost to a
point where smaller connectomes, like those of flies, could be mass-
produced.

The deuterostome-protostome division, together with more recent

evolutionary shifts, also offers the possibility of a new science of
comparative connectomology. In some cases it is already clear that giving
natural selection multiple bites at the cherry has resulted in more than one
solution to the same problem. The overarching organisation of the neurons
in fly brains and vertebrate brains, for example, is completely different. In
other instances, though, both brains seem to work in the same way,
suggesting that might be the optimal way of doing things.

These natural experiments, the circuit-diagrams of which connectomes will

make available, might even help human computer scientists. Brains are, after
all, pretty successful information processors, so reproducing them in silicon
could be a good idea. As it is AI models which have made connectomics
possible, it would be poetic if connectomics could, in turn, help develop
better AI models. ■

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Science & technology | So much hot air

Why it’s so hard to tell which climate policies

actually work
Better tools are needed to analyse their effects
October 2nd 2024

NATIONAL CLIMATE policies are a relatively recent invention. In 1997,

according to the Grantham Institute, a think-tank at the London School of
Economics, there were 60; by 2022 the number had risen to almost 3,000.
Their effectiveness has proved almost impossible to measure. In August, an
international research group published the first global evaluation of climate
policies in Science, a journal. The study, which looked at around 1,500
policies implemented in 41 countries between 1998 and 2022, found that just
63 could be linked to sizeable reductions in emissions.

The successful policies shared some similarities. Taxation was generally

effective; so was mixing different interventions. In Britain, for example, the
researchers reckoned that a range of policies introduced in the 2010s—
including a minimum carbon price for power producers, the phase-out of
coal plants and stricter rules about air pollution—achieved a 40% cut in
emissions from the electricity sector.

Combined, researchers reckoned the 63 success stories reduced emissions by

up to 1.8bn tonnes of carbon dioxide, more than the combined net total of
Britain, France and Germany in 2023. That is commendable. But it is barely
a sixth of what is needed to stop global temperatures from rising beyond 2°C
above pre-industrial levels by the end of the century.

There is little evidence to suggest that the remaining 1,400 or so worked.

That does not mean they were total failures. For one thing, the study in
Science looked only at near-term effects; for another, the lack of available
data meant significant sectors (such as agriculture) as well as vast regions
(like most of Africa) were excluded. But their exact impact is unknown.

That ignorance is at odds with the speed and scale of the action required. It
is partly the result of the field’s traditional focus on modelling science,
rather than policy, explains Jan Minx, who leads the Applied Sustainability
Science working group at the Mercator Research Institute in Berlin.
Predictions about climate are routinely collated and evaluated in the vast
“assessment reports” published by the Intergovernmental Panel on Climate
Change (IPCC). Several influential international institutions, such as the OECD and
the World Bank, review countries’ environmental efforts and make
recommendations about how they might improve. But in general they do not
analyse the actual impact specific interventions have on emissions. Nor do
most government reports.

Things do not have to be this way. Academics in other fields regularly

perform systematic policy reviews, in which a wide range of evidence is
collected and analysed in a transparent and reproducible way. In clinical and
public-health research this “has absolutely been the norm for the last 30
years,” says Alan Dangour, the head of the climate and health team at
Wellcome, a research-funding institute based in London. (By one reckoning,
80 systematic reviews relating to epidemiology were published per day in
2019 in English alone.)
Both Dr Minx and Dr Dangour are part of a growing effort to establish
something similar in climate policy. The first step is persuading the right
people. This June in Berlin, after more than two years of drumming up
support, Dr Minx and his colleagues hosted What Works, the first
international conference for evidence synthesis in climate policy. Among the
300-plus attendees were Jim Skea, the IPCC’s chairman; Jennifer Morgan,
Germany’s climate envoy; plus representatives from Wellcome and the
Bezos Earth Fund (a $10bn pot set up by Amazon’s founder). More
meetings are planned.

The next step involves teaching climate researchers how to synthesise

evidence in meaningful, standardised ways. Techniques that work in
epidemiology, for example, which often examine limited regions over
timescales of days or weeks, need adapting for global climate analyses
spanning decades or centuries. The conference in Berlin was followed by
two days of this type of training for attendees, and Dr Minx says the aim is
to offer similar sessions to ever more researchers.

But it is also necessary to speed up the entire process. Artificial-intelligence

(AI) models, which excel at repetitive and lengthy tasks like identifying and
digesting relevant papers, can help. The research group behind the Science
paper themselves used a combination of machine learning and statistical
analysis to link emissions cuts with potential policies. A separate project in
2021 used AI models to discover that there was almost no scientific literature
on climate change and maternal and child health, nor on studies focusing on
regions like Africa and South America. Wellcome is now funding projects
explicitly aimed at plugging those gaps.

AImodels can also help keep the existing evidence bank up-to-date. Because
scientific understanding of the climate system is still evolving—just how
much warming should be expected from each extra unit of carbon dioxide in
the atmosphere is still a hotly debated topic, for example—that would help
policymakers make the best decisions possible.

There was a concerted effort to create such “living” platforms during the
covid-19 pandemic. Dr Minx and Dr Dangour both think a similar version is
needed for climate policies; and quickly. “We have 30 years left to get
emissions down to net zero,” Dr Minx says. “We really need to be efficient,
we need to be thrifty and we need to apply rigour—and that starts in science
and ends in policy.” ■

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Science & technology | Island life

Isolated communities are more at risk of rare

genetic diseases
The isolation can be geographic or cultural
October 2nd 2024

ISLAND LIFE is famously idyllic, but it’s long been known that islanders
tend to experience disproportionately high rates of some rare genetically
transmitted diseases. Faroe islanders, for example, who live on an
archipelago in the North Atlantic Ocean, have a much higher-than-average
incidence of carnitine transporter deficiency (CTD), a condition that prevents
the body from using certain fats for energy. Inhabitants of Gran Canaria,
meanwhile, an island off the north-western coast of Africa, are far more
likely than average to have familial hypercholesterolaemia, a condition
where the liver cannot process cholesterol effectively.
A new paper in Nature Communications provides one more such example.
Jim Flett Wilson from the University of Edinburgh, who led the study,
reports that people living on the Shetland Islands in northern Scotland have a
one-in-41 chance of carrying the gene variant which causes Batten disease, a
life-limiting neurodegenerative disease. The comparable rate elsewhere in
Britain is one in 300, says Dr Wilson.

Such elevated risk is likely to be the consequence of genetic isolation. When

members of a small population overwhelmingly reproduce with their
fellows, the probability of children acquiring disease-causing mutations
(known as variants) from their parents increases over time. This happens
because of a process known as random genetic drift, says Dr Wilson,
whereby some genetic variants become more common and others are lost.
“This effect is magnified in small populations with little or no inward
movement of new people to replenish the genetic pool,” he says.

Such isolation need not only be the product of encircling water. Dr Wilson’s
new study also found “genetic islands” on the British mainland. In
Lancashire, for example, the researchers found locals were more likely to
have ten disease-causing variants—including one associated with Zellweger
syndrome, a disease affecting the brain, liver and kidney which can be fatal
in the first year of life. Those from the area were 73 times more likely to
have the variant. In South Wales, one variant responsible for an inherited
predisposition to develop kidney stones later in life was 44 times more
common, whereas in Nottinghamshire a variant causing a severe blistering
skin disorder was 65 times more common than elsewhere.

Such genetic islands can arise from geography and culture, says Dr Wilson,
including a widely shared preference for individuals to pick spouses from
the same community they grew up in. Some such islands are already
monitored by health authorities. The NHS, for example, runs screening
programmes for those of Ashkenazi Jewish descent, as around one in 40
Ashkenazi Jewish people carries harmful variants to the BRCA gene which
make them more at risk of breast or ovarian cancer. This compares with
around one in 260 people in the general British population.

The incidence of Batten-disease carriers among Shetland islanders is similar

to that of the BRCA variant among Jews, says Dr Wilson, and yet no plans exist
for a screening programme there. He says that the reliance on the “cascade”
model, whereby people are offered testing only after a family member is
diagnosed, is only half as reliable at picking up cases as universal testing on
demand. Until such screening programmes are put in place, islanders risk
being doubly isolated. ■

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Science & technology | Sound of mind

AI offers an intriguing new way to diagnose

mental-health conditions
Models look for sound patterns undetectable by the human ear
October 2nd 2024

Traditional methods of diagnosing mental-health conditions require patients

to speak directly to a psychiatrist. Sensible in theory, such assessments can,
in practice, take months to schedule and ultimately lead to subjective
diagnoses.

That is why scientists are experimenting with ways to automate this process.
Artificial-intelligence (AI) tools trained to listen to patients have proved
capable of detecting a range of mental-health conditions, from anxiety to
depression, with accuracy rates exceeding conventional diagnostic methods.
By analysing the acoustic properties of speech, these AI models can identify
markers of depression or anxiety that a patient might not even be aware of,
let alone able to articulate. Though individual features like pitch, tone and
rhythm each play a role, the true power of these models lies in their ability to
discern patterns imperceptible to a psychiatrist’s ears.

AIhas been used by mental-health professionals before. Large language

models (LLMs), for example, can trawl transcribed interviews for patterns of
speech and contextual cues symptomatic of psychological disorders. But
text-based AI has limitations. Cultural nuances, language barriers, and
different levels of fluency can skew results. LLMs have also been shown to
reflect the linguistic biases prevalent in society: in one study, an LLM failed to
diagnose depression in black patients compared with white counterparts.

Moreover, LLMs are known to “hallucinate”—which is to say they generate

plausible-sounding but factually incorrect information. This shortcoming is
particularly problematic in a field where accuracy can mean the difference
between appropriate treatment and misdiagnosis.

That is why the new methods under development do not pay attention to
individual words but rather to how those words are spoken. An AI model
developed by researchers at South-Central Minzu University in China, for
example, looks for subtle changes in a patient’s voice. The researchers
hypothesise that those with depression may have distinctive ways of
speaking too subtle for the human ear to detect.

The system uses “pre-training”—a technique whereby the model is first

exposed to huge amounts of general speech to help it recognise complex
audio patterns. These patterns might include variations in rhythm, pitch
variability and voice quality that are typically imperceptible to human ears.
This pre-training acts as a linguistic tuning fork, allowing the system to pick
up on intricate variations in speech that may signal depression, without
needing to understand the words themselves. The researchers then adjusted,
or “fine-tuned”, this general-purpose system specifically for depression
detection with the help of recordings of patients with depression.

This fine-tuned method showed remarkable accuracy. In results published in

Nature Scientific Reports in June, the method was able to detect the presence
of depression in a binary classification task 96% of the time, and was 95%
accurate when asked to categorise its severity into four levels (no
depression, mild, moderate and severe) based on one clinical rating scale.

Other methods are also bearing fruit. Researchers from Sorbonne University
in Paris have developed a method that analyses sound waves recorded via a
smartphone app to detect various mental-health conditions. First, the sound
waves are converted into visual maps called spectrograms that chart how a
voice’s frequency and volume vary over time. The model then examines
each individual spectrogram for features indicative of various psychiatric
disorders, including depression, anxiety, insomnia and fatigue.

Once again, the AI model undergoes pre-training on a vast dataset of voice

recordings, learning to recognise general speech patterns and characteristics.
It then uses this knowledge to interpret the spectrograms from individuals in
the study. This method employs deep learning techniques to automatically
extract relevant features from the raw audio data, rather than relying on
predefined acoustic characteristics. This means the exact cues the system
uses are not easily interpretable by humans—a common, if sometimes
contentious, aspect of many advanced AI systems. The results, published in an
online preprint in March, are promising, but the research is still in its early
stages.

I’m listening
The potential applications are vast. Sound-wave analysis makes it easier for
patients to be assessed even if they cannot accurately articulate their mental
state, or are in distress. Because it works across languages, the method
would also help a wider range of people and could offer valuable help in
rural areas with few mental-health professionals. For overburdened
clinicians, speech analysis could help triage patients and offer continuous
monitoring for those requiring at-home treatments.

Diagnosis, though valuable, is only the first step. Different people with the
same condition often require bespoke treatments for the symptoms they find
most troubling. In depression, for example, “Some may have issues with
memory, others with fatigue,” says Gavin Tucker, a child psychiatrist at the
Maudsley Hospital in London. The next step, then, for this promising
technology seems clear—build AI models that can help doctors personalise
the treatments they give to patients. ■

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Culture
The Malcolm Gladwell rule: how to succeed while annoying critics
The best new books to read about finance
Was Abraham Lincoln gay?
Fashion photography is in vogue
Turn down the K-pop and pay attention to K-healing
Roald Dahl was a genius—and a shocking bigot
Culture | The stickiness factor

The Malcolm Gladwell rule: how to succeed while

annoying critics
A new book offers a chance to assess why he has global appeal
September 27th 2024

Revenge of the Tipping Point. By Malcolm Gladwell. Little, Brown; 368

pages; $32. Abacus; £25

YOU KNOW what you’re getting when you open a book by Malcolm Gladwell. It
will centre around a modestly counterintuitive argument: being huge and
strong is often a disadvantage, for instance, or talent and genius are
overrated. Evidence for this thesis will be broken into around ten chapters,
each containing a combination of briskly written reportage, historical
anecdote and social science that draws out unexpected connections—
between, for example, Lawrence of Arabia and a girls’ basketball team, or a
high-achieving school district and the wild-cheetah population. Readers will
finish the book feeling better informed about how the world works.

Mr Gladwell’s detractors say this feeling is an illusion. Social scientists who

have reviewed his writing snarkily point out minor factual errors. Others
consider him a “bullshitter” who cherry-picks data, oversimplifies complex
questions and sprinkles social science over platitudes to make them seem
profound. For his part, Mr Gladwell has argued that “People who read books
in America seem to have no problem with my writing. But I am clearly a bee
in the bonnet of some of the kinds of people who review books.” On the one
hand that sounds defiantly folksy. On the other it is a tacit admission that the
people who read his work most closely find flaws.

Such criticism, however, has done little to dent Mr Gladwell’s success. He

has sold 23m books in North America alone. Six of his seven books have
been international bestsellers. Three of them (“Outliers”, “Talking to
Strangers” and “The Tipping Point”) spent, combined, around 18 years on
the New York Times bestseller list. He hosts a popular podcast, “Revisionist
History”, now in its tenth season, and commands six-figure speaking fees.

Mr Gladwell revealed a market for idea-driven books that use social science
to illuminate pop culture and render the world more comprehensible. In his
wake, authors such as Daniel Kahneman (“Thinking, Fast and Slow”) and
Steven Levitt and Stephen Dubner (“Freakonomics”) have found similar
fame. Mr Gladwell’s name has become an adjective: one veteran book editor
says, “When people pitch me something they want to portray as a ‘big idea’
book, they always say, ‘It’s very Gladwellian.’”

His new book, “Revenge of the Tipping Point”, provides an opportunity to

assess his success and his critics’ arguments. It returns to familiar ground:
Mr Gladwell titled his first book, published 24 years ago, “The Tipping
Point”. In essence, it was an epidemiological metaphor strung across ten
chapters, arguing that ideas, habits and practices can grow exponentially
from a tiny starting-point, just as contagious diseases do, and that they have
a “tipping point” when minor becomes major.

He posited three rules of epidemics: the “law of the few”, which states that
big social changes often stem from the actions of a small number of people;
the “stickiness factor”, which argues that “There are specific ways of
making a contagious message memorable”; and the “power of context”,
which says that “Human beings are a lot more sensitive to their environment
than they may seem.”

Rule-making is a Gladwellian hallmark. In “David and Goliath” (2013) the

rule is that “The powerful and strong are not always what they seem.” In
“Outliers” (2008) he proposes “the 10,000-hour rule”, which posits—using
Bill Gates, the Beatles, violinists and chess grandmasters as evidence—that
is the minimal amount of practice time required to become great at
something. Learning these rules makes readers feel smarter: stories are what
happened, whereas rules have an implied predictive power about what will
happen. They also deliver a hit of narrative satisfaction: a moral at the end of
the parable.

Often, though, these rules are less profound than they appear. Large
conventional armies (Goliaths) have long been vulnerable to nimble
guerrilla Davids. Mr Gladwell called 10,000 hours “the magic number of
greatness”; the research on which he bases this is much less conclusive.

Mr Gladwell at first appears to be heading down the same old path in his
new book. After writing about the rash of bank robberies in Los Angeles in
the 1980s-90s (attributable to enterprising gangsters and copycats) and low
vaccination rates among students at Waldorf independent schools, Mr
Gladwell wonders why these trends did not spread to other cities or schools:
“There must be a set of rules, buried somewhere below the surface.”

The heart of this book, however, is not rules, but a delightfully tricky
question: if people understand where a tipping point lies, can they avoid it,
and at what cost? Opioid prescriptions, for instance, are markedly lower in
states with relatively onerous reporting requirements for doctors. Should a
state try to engineer its way out of some future addiction crisis by imposing
burdensome regulations?

Harvard, Mr Gladwell argues, engages in a more nefarious sort of social

engineering: by easing admissions standards for athletes in obscure and
sometimes expensive sports such as fencing and sailing, it favours white
students. If older and heavier people spread viruses more widely than
younger and thinner ones, as research cited by Mr Gladwell suggests they
might, should others refuse to sit next to them on a plane during a
pandemic? Around 10% of vehicles cause more than half of car-based air
pollution; if a roadside test can target them more precisely than standard
emissions tests can, should they be taken off the road, even if a large share
of them belong to poor people who cannot afford a replacement?

Mr Gladwell, to his credit, declines to tip his hand, inviting readers to

consider how they feel about social engineering. But these sorts of questions
have a dark edge to them; whereas Mr Gladwell’s first take on “The Tipping
Point” was largely wide-eyed and optimistic, this book reflects a more
techno-sceptical age.

Two things are near-certain about this book: it will wind up, probably soon,
on bestseller lists. His detractors, also soon, will sneer at it. Steven Pinker, a
psychologist at Harvard, said in a review in 2009 that “Readers have much
to learn from Gladwell the journalist and essayist. But when it comes to
Gladwell the social scientist, they should watch out.”

This line of criticism misses the point. Mr Gladwell is not a social scientist,
nor does he claim to be. He is a journalist who popularises ideas from social
science using what he has called “intellectual adventure stories…Their
conclusions,” he concedes, “can seem simplified or idiosyncratic.” But
stories are also, to use a Gladwellian phrase, sticky. The 10,000-hour rule is
memorable; “work hard” is the forgettable line that every coach, teacher and
parent has said a million times over.

His work may be formulaic, but so are spy novels, romantic comedies and
pop songs. The secret to his success lies less in what he says than in how he
says it. Mr Gladwell is a great storyteller and writes with a contagious sense
of curiosity, with each revelation seeming as exciting to him as it is to
readers. He may be an entertainer, but there are worse ways of being
entertained than being prodded to think differently about the world. ■

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Culture | Money matters

The best new books to read about finance

The joys that can come from good writing about the dismal science
October 3rd 2024

Money. By David McWilliams. Simon & Schuster; 416 pages; £25

How Economics Explains the World. By Andrew Leigh. Mariner Books;

240 pages; $26

THERE IS NO shortage of books on the history of money, for the straightforward

reason that publishing them reliably convinces readers to part with theirs.
And no wonder. Money is a central part of everyday life, as well as being a
route to power or ruin. It is strange, seductive and maddeningly difficult to
understand, all of which makes it irresistible. Yet that allure rarely makes it
to the page. Money is fascinating. But reading about money can be mind-
numbingly dull.
That is certainly not a description that can be applied to “Money”, a new
book by David McWilliams. Do not be put off by the fact that the author is a
former central banker—this is no dry tome on monetary theory. Instead, it is
a whistle-stop tour through human history, with money and its engineers as
the central characters. It opens with Adolf Hitler’s plot to destabilise Britain
by forging £133m (£5.2bn, or $6.9bn, in today’s money) and ordering the
German air force to scatter it over the country, hoping to set off
hyperinflation. Hitler’s reasoning is also Mr McWilliams’s central theme:
money and society are inextricably bound together.

A dizzying array of historical anecdotes follows. Readers are introduced to

the Ishango bone, a baboon’s femur from around 18,000BC that may have
been used to tally credits and debits. They learn about interest rates in
ancient Mesopotamia (about 33% a year for barley), the invention of coins
by the Lydians in Anatolia and how Tiberius, a Roman emperor, triggered a
credit crunch. Romping through Florence’s creation of one of the world’s
first reserve currencies in the medieval era and the financing of the French
and American revolutions, Mr McWilliams comes to the present, worrying
that central bankers have lost control of money entirely.

It is an impressive journey that fizzes with facts. Yet between the author’s
love of a good yarn and fear that a book about money might become boring,
it is a shame that some big financial ideas get lost. A chapter on Fibonacci,
an Italian mathematician, for example, describes Messina’s bustling port and
King Roger II’s architectural tastes over pages, but spends just a paragraph
on his ideas about valuing future cashflows (essential for most modern
finance) and his popularisation of double-entry book-keeping (the
foundation of modern accounting).

Given the scale of the topic, such quibbling may seem harsh. How, after all,
can a short book survey the full history of something so vast and remain
readable? To find out, read “How Economics Explains the World”, by
Andrew Leigh, formerly an economics professor at the Australian National
University and now a member of the Australian Parliament. In simple, clear
language—and less than 200 pages—it does exactly what its title promises.

To Mr Leigh (and plenty of others) economics is the science of how people

“maximise their well-being in the face of scarcity”. He illuminates how
people have become much better at this by charting the number of hours’
work throughout history that it has taken to produce an hour’s worth of light
for a household. Our prehistoric ancestors would have had to spend 58 hours
foraging for timber; in the late 1700s, it would have taken five hours to
make an animal-fat candle that smelled awful. Today less than a second’s
work will earn a typical worker enough to flick the switch.

Mr Leigh then canters through the history of human progress, pausing

briefly to explain the economic forces and ideas that drove it forward. Why
did Europeans colonise Africa rather than the other way round? Because of a
better climate for farming and more easily domesticated animals, leading to
a bigger agricultural revolution and more wealth and military might. Why do
Protestant countries have high incomes? Because 16th-century Lutherans
learned to read, which fuelled economic development. Why did American
cities grow more quickly than European ones starting in the 19th century?
Because American cities were built on grids, making it easier to connect
new homes to sewerage and transport.

Along the way, readers meet the big economic thinkers who sought to
explain these forces. Both finance aficionados and mere novices will read,
savour and return to these books, giving fresh meaning to the concept of
“book-keeping”. ■

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finance
Culture | Revisiting history

Was Abraham Lincoln gay?

A controversial documentary re-examines the president’s relationships
with men
October 1st 2024

DURING America’s civil war, in 1862, Abraham Lincoln reportedly began

sharing a bed with his bodyguard, a soldier named David Derickson. The
tittle-tattle was recorded in the diary of Virginia Woodbury Fox, the wife of
Lincoln’s naval aide, who wrote about “a soldier here devoted to the
president, drives with him, and when Mrs. L. is not home, sleeps with him”.
She added: “What stuff!”

Mere gossip, you might argue—or simply a sensible idea, given the target on
Lincoln’s back. But a new film, “Lover of Men”, examines four of Lincoln’s
relationships, conducted from his 20s to his 50s, to claim that he had sex
with men. A popular comedy play, “Oh, Mary!”, presents Lincoln’s wife as
his beard; its run on Broadway was recently extended until January.

In the early 1830s, while working at a general store in Illinois, Lincoln

shared a cot with William Greene, his co-worker, for 18 months. The bed
was cosy: in a suggestive letter, Greene remarked that Lincoln’s “thighs
were as perfect as a human being could be”. In 1837 Lincoln moved to
Springfield to practise law and met Joshua Speed. They shared a bed for four
years. “No two men were ever more intimate,” is how Speed summarised
their relationship.

Just how intimate is a touchy subject among scholars. “Such sleeping

arrangements were not uncommon on the Illinois frontier,” asserts Michael
Burlingame, a historian at the University of Illinois, who does not see any
“proof of a homosexual relationship” in Lincoln’s bedsharing. Mattresses,
after all, were expensive at the time. But once he was a lawyer Lincoln
“could have afforded not only a bed but a house”, Thomas Balcerski of
Eastern Connecticut State University says in the film; Lincoln was offered
housing elsewhere but chose to stay with Speed.

When Speed returned to Kentucky in 1841, Lincoln became depressed. He

wrote: “I am now the most miserable man living. If what I feel were equally
distributed to the whole human family, there would not be one cheerful face
on the earth.” The two men continued to exchange letters sharing their fears
of marriage and women.

Lincoln’s aversion to women was remarked on. He “never took much

interest in the girls,” Sarah Bush Lincoln, his stepmother, said. Marriage was
helpful for public office, though, and Lincoln married Mary Todd in 1842.
Lincoln had often signed his letters to Speed “yours forever”, but never
missives to his wife.

To some, speculation about Lincoln’s sexuality is inevitable in an era

obsessed with identity politics. But such surmising is not new. In a
biography from 1926, Carl Sandburg, a Pulitzer-prizewinning biographer,
wrote that the president had “a streak of lavender, and spots soft as May
violets” (a euphemism for homosexuality). The passage was later removed.
It is only as same-sex relationships have gained legal and social acceptance
that historians have reopened this line of inquiry. “Lover of Men” is part of a
larger trend in revisionist history—the challenging of orthodox views and
narratives. “Revisionism” can carry a pejorative connotation, and histories
that dissent from conventional interpretation can be deemed heretical. Yet
historians often update their understanding of the past. New methods of
analysis and perspectives introduced by fresh generations of scholars alter
received wisdom. For years scholars denied that Thomas Jefferson fathered
children by his slave, Sally Hemings, as it was a proposition too unsavoury
to stomach. Today most historians accept that he did.

Interpretations of Lincoln’s relationships have “shifted considerably”, says

John Stauffer, a historian at Harvard University. Still, many scholars
maintain that Lincoln’s relationships with men were platonic. One reason,
according to Mr Stauffer, is that they treat Lincoln “as an almost godlike
figure” and do not want to contemplate hidden sexual tastes. “Lover of
Men” is unlikely to precipitate a wholesale re-evaluation of Lincoln’s
legacy. Some Americans will continue to see the great patriot in much the
same light as before; others will lambast the documentary’s findings as woke
nonsense. In the 21st century, America remains a house divided. ■

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Culture | No passing fad

Fashion photography is in vogue

Museums and collectors now want what were once panned as commercial
images for their walls
October 3rd 2024

ELTON JOHN had just finished a stint in rehab. Without the fog induced by
drink and drugs, he found he was able to look at the world with “clear eyes”.
So when David Fahey, a gallerist, showed him work by three fashion
photographers—Horst P. Horst, Irving Penn and Herb Ritts—the musician
was transfixed. It marked the start of what would become one of the world’s
largest private photography collections. More than 30 years later, Sir Elton
has amassed more than 7,000 images.

Given his passion began with fashion photography, so does “Fragile

Beauty”, an exhibition of selections from Sir Elton’s collection, on display at
the Victoria and Albert Museum in London until January. A recent show at
the Saatchi Gallery, “Beyond Fashion”, showcased the artistry and
experimentation of the genre in recent decades. Elsewhere museums have
focused on the oeuvres of single artists: this year alone there have been
shows dedicated to the work of Penn, who died in 2009, as well as several
contemporary photographers. An exhibition looking at the pioneering
aesthetic of Deborah Turbeville, a fashion editor who became a
photographer, opens on October 9th at the Photographers’ Gallery in
London.

The art world is firmly fashion-forward. Exhibitions about designers have

drawn hundreds of thousands of visitors. Artists including Tracey Emin,
Damien Hirst and Yayoi Kusama have collaborated with fashion brands; the
Louvre, the Met and Tate Modern have all hosted catwalk shows or industry
events. More attention is being paid to the talent involved in making
beautiful things, and so fashion photography—a form which was once
disparaged as crass and commercial—is now being celebrated for its
creativity.

The genre is appealing to collectors’ as well as curators’ tastes. “The market

for fashion photography is thriving,” says Emily Bierman, head of
photography at Sotheby’s, an auction house. “High art and high fashion
absolutely meet and have become very coveted and collected.”

Three living fashion photographers, Markus Klinko, Juergen Teller and

Paolo Roversi, are among the top photographers seeing the most growth in
interest on Artsy, an online art marketplace; year-on-year, inquiries about
their work are up between two and three times. For a large print of one of Mr
Klinko’s pictures of David Bowie with a wolf, originally taken for GQ, you
can expect to pay more than $300,000.

Often fashion photography deals in a kind of fantasy: few, after all, stand
next to a wolf or get to pose with pachyderms in a Dior gown. “It is about
creating a fictional world,” Nathalie Herschdorfer, the curator of the Saatchi
show, says, “where people can dream and escape.” The impulse to gaze on
something bewitchingly beautiful is an enduring one, but it is particularly
acute in times of turbulence. Fashion photography jolts the viewer out of the
grim and the quotidian.
Like other works of art, the images can transport you into the past. Clothes
reflect the mood of the time, be it jazz-age ebullience or hippyish liberation.
An image by William Klein, part of Sir Elton’s collection, features clothing
and accessories inspired by astronauts: it was taken in 1965, when the cold
war was raging and fascination with space was nearly universal.
Contemporary work offers similar insights. Mr Klinko, who has
photographed the likes of Beyoncé and Kim Kardashian, says he thinks of
himself as a “documentarian of pop culture”. His work is often suffused with
allusions to mythology as a way of exploring how “Society is worshipping
celebrity almost like a religion.”

In the current digital age, people are constantly bombarded with images;
anyone with a smartphone can fancy themselves a photographer. Yet rather
than dulling interest in fashion photography, social media have heightened it,
as they underscore the inventiveness of artists. Few, for instance, could
recreate Horst’s dramatic compositions with corsets and skirts or Melvin
Sokolsky’s “Bubble” series for Harper’s Bazaar, which required a crane to
hoist the model into the air. Fashions may come and go, but the greatest
fashion photographs stand the test of time. ■

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Culture | The next big thing

Turn down the K-pop and pay attention to K-

healing
The rise of South Korean books about burnout has taken the world by
storm
October 3rd 2024

The country that gave the world popular bands such as BTS and hits such as
“Parasite” and “Squid Game” is now exporting something slower-paced.
The publication of “Marigold Mind Laundry” in America and Britain this
month brings attention to the latest South Korean trend: the healing novel.

These books about burnout can be judged by their covers, which ooze
wholesome peacefulness. Most depict an attractive building in a soothing
colour, with nature artfully arranged outside. In the stories characters leave
behind stress in search of something more meaningful. A high-flier sets up a
bookshop; a TV writer quits her job and starts pottery classes. A connection to
a new place brings connections to new people on their own quests for well-
being. From cats to kimchi, ice-cream to coffee, “cosy healing elements”
abound, says Clare Richards, translator of “The Healing Season of Pottery”,
a popular novel in Korea that is set for international release this autumn.

South Korea has long had a market for comforting tales with themes of
healing, as has Japan. But the current trend emerged during the pandemic,
when the genre started to dominate South Korean bestseller charts. The
depiction of communal spaces held strong appeal during a time of social
constraints, says Joy Lee, a foreign-rights agent. Like many pastimes,
healing fiction thrived online, attracting young female readers seeking
recommendations from social media. (Several novels were published online
first or through crowd-funding, rather than through conventional publishing
routes.) Enthusiastic reviews from K-pop stars helped fuel the craze.

International publishers have taken note. Bloomsbury, Hachette and

HarperCollins have all published or acquired K-healing bestsellers; Penguin
Random House will bring out three titles in the next four months. Korean
fiction was suddenly in fashion and “completely exploded”, says Jane
Lawson of Penguin Random House. The healing trend has become “utterly
global”; many titles have contracts in between 15 and 20 territories.

This reflects a broader shift, with interest in translated fiction rising,

especially among young readers. In 2022 sales of translated fiction rose by
22% in Britain; almost half of readers were under 35, according to the
Booker Prize Foundation, which awards literary prizes. “We’ve always had
very diverse genres in Korea, but now it feels like healing fiction equals
Korean fiction” for international publishers, says Ms Lee, who notes that
literary offerings within Korea are more diverse than what is being exported.

Why did South Korea spawn the healing novel? It is a function of its
competitive culture, rife with burnout. Seven out of ten South Koreans
report mental-health issues, such as depression; nap “cafés” are common in
Seoul. The books’ characters wrestle with work exhaustion or job-hunt
unsuccessfully. “I’m good at studying…I work super hard. How dare society
turn its back on me?” laments a forlorn graduate in Hwang Bo-reum’s
“Welcome to the Hyunam-Dong Bookshop” (2022), a bestseller about a
woman who quits her job and opens a bookstore. Ms Hwang wants to
comfort readers by “providing a pat on the shoulder for those who’ve lost
the joy in life, having pushed themselves too hard to do well”, her author’s
note explains.

The genre’s success also indicates the appeal of escapism. Sometimes the
novels’ locations are marvellous as well as mindful: a laundry that washes
away trauma; a shop where you can buy dreams. The books benefit from
slow reading, says Shanna Tan, a translator of several healing novels.
Readers come to book talks with their heavily annotated copies in tow,
words of life advice underlined. It is literary therapy—by the book. ■

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to-k-healing
Culture | Back Story

Roald Dahl was a genius—and a shocking bigot

No magic potion or friendly giant can resolve this tension, as a new play
shows
October 3rd 2024

Perhaps, in THE squeamish spirit of the times, the Royal Court Theatre in
London should have put on two versions of “Giant”, a blistering new play
about Roald Dahl—one that quoted his bigoted remarks about Jews, the
other omitting them for propriety. As it is, the show is an unblinking study of
a great author’s prejudice and its bearing on his art. Unlike Dahl’s zany
children’s stories, with their noble heroes and appalling villains, this one
offers no easy morals.

Some of his best friends were Jewish. At least, some of his publishers were.
Set in 1983, the play imagines a lunch hosted by Dahl (played by John
Lithgow) for his actual British editor, Tom Maschler (Elliot Levey), and an
invented American publishing executive (Romola Garai), both Jews. The
playwright, Mark Rosenblatt, could not have known how eerily timely his
premise would be.

In 1982 Israel invaded Lebanon; in a real-life review of a book about the

siege of Beirut, Dahl (pictured) vaulted the line between criticism of Israel
and antisemitism. The Jews had revealed themselves as a race of “barbarous
murderers”, he wrote. “There is a trait in the Jewish character that does
provoke animosity,” he added in an interview, cited on stage. “Even a stinker
like Hitler didn’t just pick on them for no reason.” The play shows Dahl’s
high-minded arguments about the Middle East degenerating into the crudest
calumnies. The Jews, he alleged, controlled the media and the American
government.

The plot hinges on whether Dahl—also portrayed as cranky, chippy, venal

and vain—will make a mollifying statement to mend his image before the
release of “The Witches”. But implicitly it poses a wider question, faced by
fans of every feted artist with disgraceful views or habits. Referring to a
character’s child, the stage Dahl asks: “Can you no longer read my books to
dear Archie?”

A wrinkle, in his case, is that the artist cannot be neatly sequestered from his
art. As is noted in the play, the “child-snatching, money-printing devils” in
“The Witches” have been seen by some as a collage of antisemitic slurs.
Dahl insulted other groups, too. The Oompa-Loompas in “Charlie and the
Chocolate Factory” were originally pygmies from the “African jungle”.
Criticised by the NAACP and others, Dahl gave them white skin instead.

As audiences may recall, another furore blew up last year after his British
publishers revised other bits of his books lest they cause offence. References
to weight, appearance and sex were tweaked; words like “ugly” and “fat”
were zapped. The row subsided on the news that the original texts would
remain available. But the dappy initiative illuminated the clash at the heart
of the play, between Dahl’s talent as a writer and failings as a man.

Dahl grasped two things that the bowdlerisers of his books overlooked. The
first was about children’s stories. The best are more than a warm bath and a
soft cuddle; they are a vicarious introduction to the world’s risks and woes.
His other intuition was about children themselves. Though they get more
leeway than grown-ups to whack each other and eat with their hands, some
adults insist on thinking of them as harmless and pure. Dahl never forgot
that they can be grubby little blighters. “Some children”, he says in the play,
“are really quite odd.”

These insights fed a nastiness in his writing that is essential to its appeal.
Dahl gleefully indulged young readers’ fascination with violence and bodily
yuckiness. The roads to his happy endings are littered with squished and
tortured baddies. As the Maschler character says, his stories let in the
world’s cruelty, “but take you out the other side”.

Dahl died in 1990. The uncomfortable truth about him is not just that he was
a glorious writer and reprehensible man. It is that these twin identities are
not opposites but mirror images. The grotesqueries in his fiction are
hilarious; but, dangerously, he reduced real people to caricatures too. The
wordplay in his stories is delightful, but his devotion to verbal japes led to
that glib reference to Hitler as a “stinker”. “The gift of your work”, a
character tells him in “Giant”, is “the curse of your life”.

Even those parents who know and care about Dahl’s racism are unlikely to
renounce his books. That would anyway punish their children rather than
Dahl, whose antic imagination and outlandish plots will always be
enchanting. At the same time, as this bracing play affirms, his vices are
unignorable. In one of his stories, a magic potion or friendly giant might
clear up this awkward tension. In real life, it is everlasting. ■

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shocking-bigot
The Economist reads
Books that probe the secrets of the Mossad
The Economist reads

Books that probe the secrets of the Mossad

Seven books on Israeli intelligence agencies, which are spearheading the
offensive against Hizbullah in Lebanon
September 30th 2024

FEW COUNTRIES take as much pride in their intelligence services as

Israel. Led by the Mossad, founded in 1949, they have been at the forefront
of Israel’s near-continuous battles against both terrorist groups and hostile
states. The Mossad in particular, the equivalent of America’s CIA or Britain’s
MI6, has acquired a reputation for audacity, inventiveness and ruthlessness.

Detonating the pagers and walkie-talkies of members of Hizbullah, an Iran-

backed militia in Lebanon, has the hallmarks of a Mossad operation.
Similarly, the Mossad will probably have been deeply involved in tracking
the whereabouts of Hassan Nasrallah, the leader of Hizbullah, who was
killed in an Israeli strike in Beirut on September 27th. These operations will
have gone some way towards restoring the intelligence services’ reputations
after their failure to forewarn of Hamas’s bloody raid from Gaza on October
7th 2023. Nearly a year later, before the latest attacks on Hizbullah’s
leadership, Yossi Sariel, the head of Unit 8200, the signals-intelligence
agency, became the latest intelligence chief to take responsibility for that
failure and resign.

A lot of sensationalist guff has been written about the Mossad, sometimes
providing the basis for film and TV spin-offs. Below, however, are seven of
the most reliable and thoughtful books on the agency and other Israeli
intelligence services, focusing on the conflicts with Hamas, Hizbullah and
Iran. These works demonstrate the strengths of Israel’s services, but also
chronicle their failures. We concentrate here on the agencies that operate
beyond Israel’s borders rather than on Shin Bet, the domestic security
service, the equivalent of the FBI or MI5.

Rise and Kill First: The Secret History of Israel’s Targeted

Assassinations. By Ronen Bergman. Random House; 784 pages; $22. John
Murray; £19.99

“Rise and Kill First” is the most reliable, readable and sophisticated account
of Israel’s secret wars against state and non-state opponents since 1948.
Ronen Bergman, an Israeli investigative journalist, focuses on assassinations
carried out by the Mossad and other agencies. But the book covers many
other operations, such as the penetration of Syria’s leadership by Eli Cohen,
a Mossad agent who was caught and hanged in the central square of
Damascus. Mr Bergman describes the assassinations in detail. They include
the killing in 1979 of Ali Salameh, an operative of the Palestine Liberation
Organisation (PLO). The Mossad first considered slipping poison into his
toothpaste or aftershave, but resorted to a huge bomb in a Beirut street that
also killed several bodyguards. The operation was in part co-ordinated by a
female agent, born Erika Chambers in England, who was recruited to the
Mossad in 1973 while studying for a master’s degree in hydrology in Israel.
This book is no encomium. Mr Bergman counts the moral and political costs
of Israel’s sometimes careless belligerence, and details some of the sharp
debates within the intelligence agencies about the efficacy of these targeted
assassinations. “Rise and Kill First” is the best book to date on the subject.
Gideon’s Spies: The Secret History of the Mossad. By Gordon Thomas. St
Martin’s Press; 832 pages; $27. Quarto; £25

Running to more than 600 pages, this is one of the most comprehensive
accounts of the Mossad, from its creation on the orders of the prime
minister, David Ben-Gurion, to 9/11 and America’s “war on terror”. Gordon
Thomas, a British writer and TV producer, had a thorough knowledge of the
Mossad. “Gideon’s Spies” is thus well researched, even if on occasion it
leans too heavily on the testimony of an unreliable former Israeli
intelligence officer, Ari Ben-Menashe. Like many other authors on the
Mossad, Thomas never questions its methods, let alone its morals.
Nonetheless, he describes well most of the formative episodes in the
Mossad’s history. They include the abductions of Adolf Eichmann (one of
the organisers of the Holocaust) in Argentina in 1960 and of Mordechai
Vanunu, an Israeli who leaked details of nuclear secrets. He fell into a
honeytrap. Thomas also tells the story of the revenge assassinations of the PLO
leaders responsible for the massacre of Israeli athletes at the Munich
Olympic Games in 1972. People who believe that America and Israel always
work hand in glove should read Thomas’s account of the penetration of
America’s intelligence apparatus by Jonathan Pollard, a spy in the Mossad’s
employ.

The Secret War With Iran: The 30-Year Clandestine Struggle Against
the World’s Most Dangerous Terrorist Power. By Ronen Bergman. Simon
& Schuster; 432 pages; $25.99 and £18.99

This is an excellent account of the long, bloody struggle between Israel and
Hizbullah and Iran up to 2008—a subject now more relevant than ever. Mr
Bergman is particularly good on the birth in Lebanon of Hizbullah, a Shia
Muslim militia: Iran largely created its armed wing as a response to the
eviction of the PLO from Beirut by Israeli forces in 1982. In the decades that
followed, argues Mr Bergman, the Mossad found Hizbullah unusually hard
to penetrate, particularly with agents (“humint” in the jargon). Unlike the PLO,
which had become unpopular in Lebanon, Hizbullah enjoyed considerable
support among the Shia population in the country’s south. The author
chronicles in detail how Hizbullah, funded by Iran, progressed in both lethal
sophistication and ambition, and how Israel, helped by America, came to
understand more about this powerful foe. The Centre for Strategic and
International Studies, a think-tank in Washington, has called it “the world’s
most heavily armed non-state actor”.

Start-Up Nation: The Story of Israel’s Economic Miracle. By Dan Senor

and Saul Singer. Grand Central Publishing; 336 pages; $19.99. Little,
Brown; £14.99

A revelation when it was published in 2009, this was the first book to
examine the intricate relationship between Israel’s economic boom since the
early 2000s and its defence industries. The authors focus on the symbiosis
between the country’s tech industry and its renowned signals and cyber-
intelligence outfits, particularly the opaque Unit 8200 and the even more
secretive Talpiot. Just as American youngsters vie to get into Harvard, Yale
or Princeton so Israeli teenagers, facing obligatory military service, compete
to get into these elite units. Thus, Israeli intelligence harvests the best of the
country’s maths and physics talent to fight Hamas and Hizbullah. Talpionim,
as graduates of the programme are known, learn the skills that enable them
to found some of the world’s biggest cyber-security and other startups. “The
only way we could overcome our attackers’ quantitative superiority of
weapons was to create an advantage built on courage and technology,” wrote
Shimon Peres, then the president of Israel, in his foreword to the book.

Trend Analysis: The Israeli Unit 8200, An OSINT-based study. Centre

for Security Studies. (2019)

There is very little information in the public domain about Unit 8200,
Israel’s equivalent to America’s National Security Agency and Britain’s GCHQ.
Indeed, its existence is barely acknowledged. Its alumni seem to have been
pretty good at keeping its secrets. But with more than 5,000 staff, it is one of
the largest units in the Israeli Defence Forces, and is increasingly at the
forefront of Israel’s hi-tech warfare against both terrorist opponents such as
Hizbullah and states such as Iran and Syria. Unit 8200 is responsible, for
example, for tracking the targets of drone attacks through their mobile
devices. That Hizbullah commanders swapped their phones for pagers is
testimony to the effectiveness of Unit 8200’s work. This think-tank study
provides a reliable history of the unit and a precis of some of its main
successes. Unit 8200 has been heavily involved, for instance, in disrupting
Iran’s nuclear programme. The study also includes an account of its
clandestine and fearsomely rigorous selection process. Unit 8200 encourages
its cadets to think creatively, perhaps a prerequisite for coming up with ideas
like exploding pagers.

Kill Khalid: The Failed Mossad Assassination of Khalid Mishal and the
Rise of Hamas. By Paul McGeough. New Press; 477 pages; $26.95.
Quartet; £25

Like other intelligence agencies, the Mossad has botched a fair few
operations. One was the attempted assassination of the leader of Hamas,
Khalid Meshal, in 1997. Paul McGeough, an Australian journalist, recounts
the bizarre episode and its far-reaching consequences in “Kill Khalid”,
written almost in the style of a thriller. The Mossad sent a small team
pretending to be Canadian tourists to Jordan. They surreptitiously sprayed
him with a slow-acting poison on a street in Amman, but an alert bodyguard
helped to capture two of the assailants. After tense negotiations the
Jordanians and Americans persuaded the Mossad to provide an antidote to
the Hamas leader, who recovered. His escape, of course, elevated his
standing within Hamas and bolstered Hamas’s prestige among pro-
Palestinian factions and parties. Mr Meshal, who is still alive, was
responsible for the redrafting of Hamas’s charter in 2017 and is believed by
America to be one of the architects of the attacks on Israel on October 7th.

Duet in Beirut. By Mishka Ben-David. Translated by Evan Fallenberg.

Overlook; 288 pages; $26.95. Peter Halban Publishers; £8.99

For a genuine thriller pick up a book by Mishka Ben-David. Like many ex-
spooks (John Le Carré from MI6 and David McCloskey of the CIA, for
example) this former Mossad agent turned to Grub Street after retirement,
producing a string of pacy spy novels starring a variety of
heroic/flawed/rogue Mossad agents in various locations around the Middle
East and north Africa. His first book, “Duet in Beirut”, must be the most
relevant to the escalating conflict between Israel and Hizbullah. It is about a
failed attempt on the life of a Hizbullah operative responsible for suicide-
bombings in Israel. If you have read just half of the books on the above list
about the real-life Mossad, the attempts by the Israelis to clear up this
fictional mess should ring true.
Also try
Follow our coverage of the Israel-Hamas war, which is pulling in Lebanon.
Read our special report on how technology is changing espionage. And here
are our recommendations of seven of the best books on spookery. ■
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secrets-of-the-mossad
Economic & financial indicators
Economic data, commodities and markets
Economic & financial indicators | Indicators

Economic data, commodities and markets

October 3rd 2024
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data-commodities-and-markets
Obituary
Maggie Smith, the dowager countess of comic timing
Obituary

Maggie Smith, the dowager countess of comic

timing
She could transform herself into anyone, hilariously
September 27th 2024

BY THE time she was in “Downton Abbey”, the television series in which
she played the waspish Dowager Countess of Grantham, Maggie Smith was
75 years old and had won every acting prize you could name. And yet, she
told an interviewer, “I’d led a perfectly normal life…Nobody knew who the
hell I was.”

That was not quite true; her fellow Brits already deemed her a national
treasure. But she could go unrecognised in public because she disappeared
so completely into her roles, switching occupations, temperaments and
social classes with apparent ease. Whereas other stars often played
themselves, she was a chameleon, always subservient to her role. On stage
or screen she was poised and precise; in her rare televised interviews, she
seemed hesitant, searching and uncertain. It would be easy to mistake her, in
passing on the street, for someone who looked a bit like Maggie Smith’s
slightly bewildered sister.

She was witty in life and devastatingly so with a script. Whether playing a
humble piano teacher or a lofty aristocrat, her comic timing was deadly, her
barbs slipping between the audience’s ribs like unexpected daggers. In “Evil
Under the Sun”, her Daphne Castle says, of an old rival from the chorus line,
“I could [never] compete. Even in those days, she could always throw her
legs up in the air higher than any of us...and wider.”

She came from Ilford, an unprepossessing patch of East London. Her parents
were lower-middle class and aspirational. She was raised amid Britain’s
dreary post-war austerity, when petrol and bacon were rationed, and drew on
this in 1984 in “A Private Function”, a dark comedy that her biographer
Michael Coveney called “nearly perfect”. She played Joyce Chilvers, a
social climber quivering with resentment and ambition. For Joyce, subsisting
on spam is humiliating; she yearns for something fancier, and persuades her
put-upon husband to steal a black-market pig. “It’s not just steak, Gilbert,
it’s status!” When her plotting succeeds, she rewards him with the
unforgettable line: “Right, Gilbert, I think sexual intercourse is in order.”

She was a happy but reserved child. Her father said she had “a private
world” that he and her mother “had no access to”. She began acting in
school, after her parents had moved her to Cowley, a suburb of Oxford. A
peer recalled, “If there was a comic part, it would be played by Margaret
Smith. She made us laugh, but we never saw her having a possible future on
the professional stage.”

When she was 29 Laurence Olivier, then Britain’s most renowned stage
actor and the director of the National Theatre, cast her opposite himself as
Desdemona in “Othello”. He was “secretly afraid” of her, by one account.
During a performance Olivier, annoyed by an offstage argument, slapped her
across the face with his hand instead of the usual paper. She was knocked
out cold; when she came to backstage, she reportedly said, “That’s the first
time I’ve seen any fucking stars at the National.” (Olivier’s stage manager
disputes this story.)
Her first Oscar was for playing an awful teacher in “The Prime of Miss Jean
Brodie”. Her performance was collected and commanding, a manipulative
tyrant with a sugared exterior who treats others as pawns to be pushed about.
Mr Coveney saw in this “subtle revenge on her Scottish puritanical mother
and indeed on [her alma mater] Oxford High School”.

Her second golden statuette was for Neil Simon’s “California Suite”, in
which she played a British actress awaiting the Oscars ceremony in a
luxurious hotel room with her bisexual husband, as her moods vacillate
between brittle hope of winning and deep gloom. She was also nominated
for playing a prim chaperone, an eccentric roustabout aunt and, in 2001, for
the role that began her late flourishing. Her career followed the inverse of
most actresses’; her fame grew in tandem with her age.

Unlike many actors, she was “totally unconcerned about playing a

dislikeable character”, and therefore liberated to play such parts with brio,
gushed Julian Fellowes, the screenwriter of “Gosford Park” and “Downton
Abbey”. In each of those period dramas, she plays a posh widow who looks
upon her small, refined world with protective disdain. “Bought marmalade,”
she sniffs in Gosford Park, when a maid brings her breakfast in bed. “I call
that very feeble.” On her deathbed in “Downton Abbey”, she hushes her
sobbing maid: “Stop that noise, I can’t hear myself die.”

In 1999 a very young Daniel Radcliffe played David Copperfield opposite

Ms Smith’s Betsey Trotwood. The director told the boy: “Whatever
happens...you will never again play the title role in a famous novel with
Maggie Smith.” Two years later he was Harry Potter and she, appropriately,
was Minerva McGonagall, a professor of magic who could transform herself
into something completely different. (A tabby cat.)

Her first marriage fell apart. Her husband, Robert Stephens, a fellow actor,
was desperate to be a megastar but never quite made it. She eclipsed him,
though she was far less interested in fame, and he resented it. After putting
up with his furniture-smashing and affairs for a while, she sensibly married a
non-actor, Alan Beverley Cross, a playwright whom she had known since
her late teens. It was a happy second act. He was “rock-like” and steady,
which perfectly complemented her anxious obsessiveness. Her sons with
Stephens, both thespians, one a Bond villain, called her “an extraordinary
mother and grandmother”.

Still, she could summon her sternness when it suited—even if, in real life, it
had a great deal more gentleness behind it than either of her dowagers. On a
British talk show, while discussing how her “Harry Potter” role had
introduced her to a new generation of fans, she recalled a boy asking her,
“Were you really a cat?” She paused for just the right amount of time. “I
heard myself saying, ‘Just pull yourself together.’” No doubt he did. ■
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comic-timing
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Obituary
Maggie Smith, the dowager countess of comic timing